Famous Tax Scandals
High-profile tax troubles through the ages
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AOL
Taxing Times
Celebrities and famous folks usually crave the spotlight. But some well-known people have attracted a lot of attention they didn’t want — from the IRS.
Check out our gallery of 19 infamous tax trouble cases — the faces you see may surprise you.
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Sophia Loren
The Academy Award winning Italian actress and beauty made headlines in 1982 when she served an 18-day sentence for tax evasion in an Italian prison.
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Wesley Snipes
The actor ran into trouble in 2006 when the government accused Snipes of failing to file tax returns for the years 1999 through 2004.
He pleaded not guilty by saying he is not actually required to pay taxes. Snipes was acquitted of the most serious charges against him on February 1, but was convicted on three others. He faces up to three years in prison.
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AP
Richard Hatch
Famous for being the first winner of the popular reality TV show ‘Survivor,’ Hatch neglected to pay taxes on his $1 million grand prize.
The Rhode Island native was convicted in 2006 of tax evasion and sentenced to 51 months in prison, plus three years of supervised release after serving his sentence.
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Leona Helmsley
After claiming some $2.6 million worth of phony business expenses, the ‘Queen of Mean’ was found guilty of tax fraud in 1992 and spent four years in prison.
At her trial, one witness testified that Helmsley had boasted: “We don’t pay taxes. Only the little people pay taxes.”
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Sony
Marc Anthony
Jennifer Lopez’s husband and latin singing superstar Marc Anthony agreed to pay $2.5 million in back taxes, interest and penalties for his failure to file returns for five years between 2000 and 2004.
Anthony was not prosecuted because he thought his accountant had filed them.
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Richard Pryor
The actor/comedian served 10 days in a Los Angeles county jail in 1974 for tax evasion following a tax investigation.
According to Pryor, he told the judge he forgot to pay. The judge told Pryor he’d remember to pay the next year.
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Luciano Pavarotti
The world-famous Italian opera singer was twice the subject of a tax investigation and accused of tax evasion: once in 1999 and again in 2001. The second time he was acquitted, but in ‘99, he did have to pay nearly $11 million to the Italian government.
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Library of Congress
Spiro Agnew
The former vice-president to Richard Nixon pleaded no contest to charges of tax evasion and money laundering in 1973. Agnew agreed to resign, received three years’ probation and paid a $10,000 fine.
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Martha Stewart
Before her recent jail time for insider trading, the queen of domesticity found herself in trouble when a judge ruled her claim of not spending a lot of time at her East Hampton, N.Y., home wasn’t a good excuse for failing to pay $220,000 in state taxes.
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AP
Willie Nelson
In 1990, the country music legend was hit with a bill for $16.7 million in back taxes from the IRS. To help him pay it, the IRS confiscated and auctioned off his assets. Fortunately for Nelson, many of them were bought by fans and given back to him.
Nelson later made fun of his tax troubles with ads for H&R Block.
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Martin Luther King, Jr.
On Feb. 17, 1960, a warrant was issued for Dr. King’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.
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Chuck Berry
The rock and roll legend famous for ‘Johnny B. Goode’ and other rock classics spent the 1970s touring and getting paid in cash … something the IRS noted. He pleaded guilty in 1979 and was ordered to perform 1,000 hours of benefit shows after serving four months in prison.
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Nicholas Cage
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 says the spending, which included “limos, meals, gifts, travel” and a Gulfstream jet, are all “security needs.” Cage has gone to tax court to dispute $814,000 in taxes and penalties.
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Dennis Kozlowski
The former Tyco CEO’s tax woes began in 2002 when he bought $13 million worth of paintings to grace his Manhattan apartment. He tried 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.
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AP
Al Capone
The granddaddy of ‘em all. Legend has it that the notorious gangster once remarked that tax laws were a joke because “the government can’t collect legal taxes on illegal money.”
The IRS charged the infamous Chicago mob boss with failure to pay four years’ worth of taxes. Capone was sentenced to 11 years in jail and an $80,000 fine in 1931.
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AP
Boris Becker
The German tennis great avoided jail in 2002 when he was convicted of tax evasion. He admitted he lived in Germany while claiming to reside in Monte Carlo. He was given two years’ probation and fined $500,000.
He decided he didn’t want to pay any more taxes in Germany, and moved to tax heaven in Switzerland.
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Don King
The boxing promoter who promoted major fights for Muhammad Ali, Mike Tyson and Evander Holyfield was charged with 29 counts of tax evasion and fraud charges in 1985. Prosecutors alleged he and a partner had conspired to divert over $1 million in corporate receipts to their personal use, but King was acquitted of all charges.
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Heidi Fleiss
The “Hollywood madam” ran one of the most successful escort services in the business and apparently failed to report her ill-gotten income to the IRS.
She was convicted in 1997 for pandering, tax evasion and money laundering and sentenced to three years. When she got out, Fleiss wrote about it all in her memoir, ‘Pandering’. -
AP
Joseph Nunan
The most ironic is probably someone you never heard of. His name is Joseph Nunan. He was the IRS commissioner from 1944-47.
In 1952, he was busted for evading taxes. It turned out that Nunan had won a $1,800 bet that Harry Truman would win the presidential election but failed to report his winnings to the IRS.
This entry was posted on Tuesday, April 15th, 2008 at 2:02 pm and is filed under blog, estate planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
