Have you wondered why so many celebrities seem like such scofflaws when it comes to paying taxes? It seems every few weeks another member of the glitterati finds themselves under fire for failing to pay Uncle Sam his due. Do they think they are above the law? It would seem so.
The long list of celebrities in some sort of tax trouble includes: Sinbad, Willie Nelson, and Wesley Snipes. And let’s not miss adding Nicholas Cage, Lauryn Hill, and Pamela Anderson to the list. Are you a fan of Stephen Baldwin? Yep, he’s on the list of scofflaws, too.
While it’s easy to point fingers at the rich and famous, taxing authorities don’t grant favoritism to Hollywood stars. For some, it comes down to this: The bigger the fish, the easier it is to get caught in the IRS net.
With fame comes attention and often a spike in income. We have a bird’s eye view of this conspicuous consumption displayed in the lifestyles of the rich and fabulous and so do those who work for the IRS. Celebrities have little chance of flying below the radar.
Staffers at the IRS aren’t the only ones watching them. The rich and famous often find themselves targets of unscrupulous people they unwittingly hire to manage their money.
We all know each person is ultimately responsible for their own taxes. These non-compliant celebrities have to face the music when the tax bill comes due. If they evaded taxes on the advice of someone else, they will be the ones who end up in court, not the advisor.
Also, celebrities typically have a cyclical income. One year they make a million dollars, the next year they make nothing. When it comes time to pay taxes, they may not have the cash to do it. Why don’t they just stash some cash? Simply put, these artistic performers don’t always make the best money managers.
Could you cough up $5,000 right now to pay your taxes? Add a zero or two to that, if you are a celebrity. They often have tax bills of $50,000 to $500,000!
The more you have, the more taxes you pay. Unfortunately for celebrities, many of them find out the hard way what happens when you fail to remit those taxes.