This Week's IRS "Hall of Shame" Inductee: Fernando Botero

The Colombian painter and Italy resident is being charged by Italian authorities of withholding nearly $9 million dollars in profit over the past five years. However, Botero holds that he does not have to pay this tax due to living in Monaco, a tax haven.

The discrepancy because arises his artwork is produced entirely by companies and foundries in Italy. These companies then distribute the work to galleries worldwide. Between 2003 and 2008, authorities allege Botero should have declared earnings.

Botero's comment? His Italian tax position will be cleared up soon.

This Week's IRS "Hall of Shame" Inductee: Larry Williams

Father of actress (and former girlfriend to Heath Ledger) Michelle Williams, Larry Williams is being investigated for at estimates $1.5 million dollar tax evasion. A former stock market trader, Mr. Williams is currently residing in Australia as the U.S. Government tries to extradite him back to the United States.

As unusual as this is, the $1.5 million dollar debt isn't related to his daughter's fame, as many start-relative tax debts are. Larry William's debt stems from monies earned from his book and seminar tour from 1990 to 2001.

And, surprise surprise, he thinks he can beat the IRS. It'll be interesting to see this one play out...

This Week's IRS "Hall of Shame" Inductee: Edward and Elaine Brown

In January of 2007, a jury found Edward Brown guilty of three counts of federal tax evasion, and a few weeks later his wife, Elaine, was found guilty on seventeen tax fraud related charges.

Combined, the two did not report about 2 million dollars in taxable income and were each sentenced to five years in prison.

Who are these people? Elaine was a dentist, and Ed was retired from a pest control business. The couple lived in New Hampshire. Doesn't seem too exciting, does it?

But what really inducts this couple into the hall of shame is that after being found guilty, they refused to surrender to the federal government. A lengthy, armed standoff ensued. Why would they do this, facing gunned men and the US Government against them? The Browns said they had not been shown any legitimate law requiring them to pay taxes, so they felt they should not be forced to pay.

Where are they now? Edward Brown is imprisoned at the United States Penitentiary at Marion, Illinois. Elaine Brown is imprisoned at the Federal Medical Center, Carswell, near Fort Worth, Texas.

This Week's IRS "Hall of Shame" Inductee: Helio Castroneves

As reported on Yahoo! News:

Helio Castroneves, the two-time Indianapolis 500 winner and TV “Dancing With The Stars” champion, was indicted Thursday on tax evasion and tax fraud charges, accused of using offshore accounts to hide millions of dollars in income from the Internal Revenue Service.

The 33-year-old driver is charged with conspiracy and six counts of tax evasion for purportedly failing to report to the IRS about $5.5 million in income between 1999 and 2004, according to court documents. Each count carries a maximum five-year prison sentence.

Let me just say again... $5.5 million. WOW.

This Week's IRS "Hall of Shame" Inductee: Rubben Studdard

Ruben Studdard, the season two "American Idol" winner, faces state and federal property liens after allegedly not paying close to $200,000 in taxes, BlackVoices.com reported.

Studdard, who is without a current record deal, owes $21,730 in state income taxes and $171,920 in unpaid income taxes to the federal government, according to the report. The story cites a lien filed in Jefferson County, Colorado Circuit Court.

A majority of the unpaid taxes are from 2003 — the same year Studdard won "American Idol." (Well what a nice coincidence!)

The state liens were filed July 25, and the federal ones were filed in May.

This Week's IRS "hall of Shame" Inductee: Joe Francis

So, I'm shocked we've somehow missed this one, especially with Joe's generous contributions to pop culture and video-journalism. But alas, the mastermind behind the Girls Gone Wild series has landed himself in some seriously hot tax water.

Allegedly, Joe deducted $20 million in fraudulent expenses on his business tax return. For this he will be appearing in L.A. court in September to make his defense. Mr. Francis' plan? Blame the accountant. Ah... always the accountant's fault. Whether this defense will hold any water remains to be seen, but we'll definitely keep you up-to-date as the story evolves!

(Read the full NY Times article)

Tax Facts "Hall of Shame" Video: Wealthy Tax Evaders

I know the "Hall of Shame" has been dormant for a while. Well, for all you fans, it's back and with a vengeance. However, instead of being a normal celebrity hall of shame, we'll be sharing a video on wealthy tax evaders. Enjoy, for this is surely shameful!

This Week's IRS "Hall of Shame" Inductee: Britney Spears

The problems continue for good 'ol Brit...

A California Franchise Tax Board document obtained by E! News cites Britney Online Inc., one of the troubled pop star's many name-brand companies, as delinquent in payment of $23,589.17 on its 2004 tax year earnings. In the state tax lien, the FTB warns that "further interest and fees will accrue" if the sum is not paid.

The bad tax news comes on the heels of a court order that Brit pay legal fees totaling more than $400,000 to attorneys who her and her family in various legal cases.

I guess the age old saying "Mo money, mo problems" really is true!

"Hall of Shame" Update- Wesley Snipes (Again)

If you're a regular frequenter of this blog, you'll be familiar with the "Hall of Shame" series we do here. You'll also be familiar with the coverage we have done on Wesley Snipes.

Well, it seems that there's more news on Snipes' case. Although he was acquitted of the felony charges, the misdemeanors he was guilty of could potentially mean some hard jail time. According to a blog post by motivational speaker Chuck Gallagher, the United State respectfully urges the court to sentence Snipes to a term of 36 months in jail and a fine of at least $5 million.

The US Government ended their "respectful urging" with this pleasing tidbit:

"In the defendant Wesley Snipes [case], the Court is presented with a wealthy, famous, and inveterate tax scofflaw. If ever a tax offender was deserving of being held accountable to the maximum extent for his criminal wrongdoing, Snipes is that defendant."

Well Wesley, looks like you're still screwed...

This Week's IRS "Hall of Shame" Inductee: Steve Irwin ("The Crocodile Hunter") 's Australian Zoo

Originally founded in 1970 by Steve's parents, the Australian Zoo is currently being investigated due to a possibly tremendous tax evasion scandal-- $2.3 million to be exact.

How did they amass this sum you say? My answer: by strategically placing large sums in overseas bank accounts to evade paying taxes. Now, to not sully the name of the deceased, I must clarify that much of the heat seems to be coming down on Irwin's wife, Terri, being that she was in primary control of the zoo's finances. It' also seems to be creating some friction in the family, as the news of tax evasion forced Steve's father, Bob, to resign from his position at the zoo.

To point one last finger, the tax evasion seems to be tied to Nick Petroulias, the former Australian tax commissioner, who has already been charge with bribery and corruption in other unrelated cases.

What do I have to say about this? At least the U.S. isn't the only country who's citizens hate paying their taxes. I guess death and taxes are global truths after all.

This Week's IRS "Hall of Shame" Inductee: Dennis Kozlowski

If the name Dennis Kozlowski sounds familiar, it is due to the fact that he was once the CEO of Tyco OR you read the headlines back in 2002 when his tax problems were made public. That year he bought $13 million worth of paintings to grace his Manhattan apartment and attempted to avoid paying sales taxes by making it appear as if they were shipped out of state. Kozlowski stepped down after the indictment and is currently serving a 25-year sentence for his other dubious business practices.

This Week's IRS "Hall of Shame" Inductee: Spiro Agnew

Richard Nixon's former vice-president, Spiro Agnew, ran into tax problems back in 1973. That year he pleaded no contest to charges of tax evasion and money laundering. Agnew agreed to resign, received three years' probation and paid a $10,000 fine.

This Week's IRS "Hall of Shame" Inductee: Boris Becker

The "Hall of Shame" is going to borrow one from Europe this week. German tennis great, Boris Becker, barely avoided jail in 2002 when he was convicted of tax evasion. Becker admitted that he lived in Germany while claiming to reside in Monte Carlo. He was given two years' probation and fined $500,000. Becker decided he didn't want to pay any more taxes in Germany, and eventually moved to Switzerland.

This Week's IRS "Hall of (A Little) Shame" Inductee: Martin Luther King, Jr.

So, we waited until after Black History Month to post this one. But, yes, it's true, Dr. King was accused of having a tax problem.

On Feb. 17, 1960, a warrant was issued for Martin Luther King, Jr.'s arrest on charges he had falsified his 1956 and 1958 Alabama state income tax returns. An all-white jury acquitted him in May.

Supporters have noted such charges were often used to discredit leaders of the U.S. civil-rights movement.

Dr. King said about his trial: "I am frank to confess that on this occasion I learned that truth and conviction in the hands of a skillful advocate could make what started out as a bigoted, prejudiced jury, choose the path of justice. I cannot help but wish in my heart that the same kind of skill and devotion which Bill Ming and Hubert Delaney accorded to me could be available to thousands of civil rights workers, to thousands of ordinary Negroes, who are every day facing prejudiced courtrooms."

This Week's IRS "Hall of Shame" Inductee: Nicolas Cage

Nicolas Cage has gone to tax court ladies and gentlemen. It would appear that the Academy Award-winning actor used his company, Saturn Productions, "to wrongly write off $3.3 million in personal expenses," reports Forbes. Cage's business manager commented stating the spending, which included "limos, meals, gifts, travel" and a Gulfstream jet, were all "security needs." Cage is in the process of disputing $814,000 in taxes and penalties. For all of you Cage fans out there (all three of you), we'll keep you posted.

This Week's IRS "Hall of Shame" Inductee: Martha Stewart

I know, I know......you're not surprised. But not everyone knew this happened to Martha. We all heard about her jail time for insider trading, but it wasn't blasted all over the news when she ran into trouble with the IRS. The "Queen of Domesticity" found herself in trouble when a judge ruled against her claim of not spending a lot of time at her East Hampton, N.Y., home as a good excuse for failing to pay $220,000 in state taxes.

Paying taxes....it's a good thing.

This Week's IRS "Hall of Shame" Inductee: Heidi Fleiss

Heidi Fleiss was well-known for running one of the most successful escort services in the business and apparently failed to report her dirty income to the IRS. As a result, she was convicted in 1997 for pandering, tax evasion and money laundering and sentenced to three years in prison.

It's a lucky week. Another "HOS" Update! - Richard Hatch

Well, maybe not if you're Rich or Wes, but it makes good news (and by this, I mean blogging material) for us. Two past "Hall of Shamers" updated in one week. Woohoo!!

So, as you may know, good 'ol Dick has been in jail since being convicted in 2005. His attorneys recently got an appeal trying to reduce the remaining 51 months of his sentence. The verdict: REJECTED!!

So Richard must survive in jail another 51 months. As put by taxgirl, "apparently, Hatch didn’t play the crazy card as well as Wesley Snipes.

Hey, Hey! "Hall of Shame" Update!- Wesley Snipes

So, we've got out first updated "Hall of Shamer"--Wesley Snipes. We've previously blogged on the details of Snipes' case.

So, let's get to the juicy stuff--- SNIPES WAS ACQUITTED!! No, way! Yes, way! In all my dealings with the IRS, I would've never though this could ever happen to anyone. Once those guys get you in their grip, there's no stopping them.

So, how was this possible? Basically blame was placed elsewhere, that is, on his tax preparers. Not to be let go without a slap on the wrist, he was found guilty of neglecting to file taxes from 1999-2004. Well, maybe not a slap on the wrist, since he faces jail time and serious penalties and interest, but definitely better than a conviction.

But besides the shock that he was not convicted is the realization that for this to happen his attorneys actually convinced the jury that Snipes whole-heartedly believed he DID NOT HAVE TO PAY TAXES.

I mean, c'mon, are you kidding me? Moreover, since when does the IRS allow a taxpayer to push responsibility of their return onto the preparer? Umm, never!

All I can say is WOW. We live in a word of slippery slopes and the tax system rides it every day...

This Week's IRS "Hall of Shame" Inductee: Derek Jeter

Imagine being paid a salary of $11 million in 2001, $13 million in 2002 and $14 million in 2003. Now imagine how much money you would save over the course of those three years if you did not have to pay state taxes. Um.....yeah...we're talking about a ton of money. Well, apparently New York Yankees' Derek Jeter had that thought in mind when he tried to falsely claim his home residence when filing income tax returns. His grand plan was to claim he resided in Florida, where he did have a home, because Florida has no state income tax. However, the IRS discovered that Jeter had officially established his home in New York in 2001, the year he bought an apartment in Trump World Tower.

Fast Forward to today and we have come to the end of his tax dilemma. It has been reported state officials have settled their case against the Yankees shortstop. The details are not known at this time, but rest assure, as soon as we know, you'll know.

Additional Resources:

TaxProfBlog has had good coverage of the unfolding case.

Until then,

Cheers!

Taxus