Monday, November 15, 2010

Current Events Watch- Paying Taxes


What happens if you don't pay your taxes? Who suffers? Find an example of a popular movie star who decided he/she wasn't going to pay his taxes. What happened to him/her? Where is he/she now?

20 comments:

  1. Probably nothing. If you're self-employed without any major assets or loans, the odds of getting busted are extremely low. In fact, an estimated 7 million Americans fail to file their taxes every year, and in 2008 the IRS examined only 158,000 such cases. That comes out to a roughly 2 percent chance of getting caught. Even if the IRS does audit you, the agency probably won't press charges. Instead, they'll just file a tax return for you and charge you a fee for the trouble.

    In 1931, Capone was indicted for income tax evasion for the years 1925-29. He was also charged with the misdemeanor of failing to file tax returns for the years 1928 and 1929. The government charged that Capone owed $215,080.48 in taxes from his gambling profits. A third indictment was added, charging Capone with conspiracy to violate Prohibition laws from 1922-31. Capone pleaded guilty to all three charges in the belief that he would be able to plea bargain. However, the judge who presided over the case, Judge James H. Wilkerson, would not make any deals. Capone changed his pleas to not guilty. Unable to bargain, he tried to bribe the jury but Wilkerson changed the jury panel at the last minute. The jury found Capone not guilty on eighteen of the twenty-three counts. Judge Wilkerson sentenced him to a total of ten years in federal prison and one year in the county jail. In addition, Capone had to serve an earlier six-month contempt of court sentence for failing to appear in court. The fines were a cumulative $50,000 and Capone had to pay the prosecution costs of $7,692.29. The jury that convicted Capone consisted almost
    entirely of rural, white men. Among them, a retired
    hardware dealer, a country storekeeper and a farmer.
    Judge Wilkerson substituted this jury for the original
    jury to prevent tampering. (CHS DN 97016)

    Bibliography:
    http://www.slate.com/id/2216218/
    http://www.chicagohs.org/history/capone/cpn3a.html

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  2. Wesley Snipes was arrested and jailed for tax evasion. He had plenty of money, and people are still curious to know why he did not pay. He failed to file tax return forms from 1999 to 2004. Before that he had filed for unusually high tax returns. He was acquited of filing a false claim back in 2008. He was sentenced to 36 months in prison. People pay taxes in order to fund the functions of a good society. When somebody does not pay their taxes, the rest of the nation will suffer because of a lack of funds.

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  3. Paying taxes isn't very enjoyable but it can be helpful in the long run. "In 1990, the Internal Revenue Service charged Willie Nelson with $16.7 million in back taxes and seized most of his assets to help pay the charges." The IRS auctioned off most of Willie's assets which were largely purchased by fans and given back to the singer. So the lesson to be learned is make sure if you're gonna evade your taxes make sure you have plenty of fans to buy your stuff back.
    http://guanabee.com/2010/04/celebrity-tax-evaders/

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  4. There are no statistics shown on how many people do not pay your taxes, but if you do not, there are penalties... "The penalty for failing to file a tax return is 5 percent a month on the balance, up to 25 percent, said Don Roberts, an IRS spokesman in Washington. If you don't owe any money, there's no penalty." If you intentionally do not file taxes, you can be fined up to $25,000 dollars, or up to a year in prison. Even some celebrities dont pay their taxes, and they get the same sentance we do. Wesley Snipes was sentenced to three years in prison, when he did not file taxes from 1999 to 2004. He tried to convince the IRS he was a resident alien- but still needs to pay $17 million in taxes PLUS interest and penalties. Another celebrity is Nicholas Cage, whom owed $6.6 million dollars from failing to pay taxes in 2007. He blamed his financial advisor, and had his home in Las Vegas foreclosed- all he had to do was move into a different home of his! One more celebrity who has evaded taxes is Snoop Dog. He owed the State of California $284,000; and it now has grown up to $598,000; and he still hasn't paid yet. So the main punishment for failing to file taxes is paying more than what you had to pay before.

    http://money.cnn.com
    http://www.businesspundit.com

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  5. According to a recent article, if you decided not to pay your taxes, this is what would happen: "probably nothing, although this writer is not advocating doing so; it’s easier than most people think if you’re willing to take the risk." The chances of getting caught when deciding not to file your taxes are pretty low. This is the most that could happen if you were to get caught, "Even if the IRS does audit you, the agency probably won't press charges. Instead, they'll just file a tax return for you and charge you a fee for the trouble." As for movie stars, it is much more difficult to get away with not paying your taxes. According to the same article, "Also, if you're planning on skipping out on filing taxes this year, it's best not to be famous. Many a movie star or country singer has gone to trial and lost when ‘forgetting’ to file their income tax returns and paying zero taxes on their income. The IRS goes to the movies and listens to country music too, just like the rest of us." Country singer Willie Nelson, decided that he did not want to pay taxes , therefore he, "lost his house and numerous other possessions in 1991 after the IRS claimed he owed more than $16 million in back taxes." The IRS did not buy what he said or offered and "he agency seized the singer’s possessions, including a host of unpublished songs." Martha Stewart is also guilty of not paying taxes, she had to, "pay $220,000 in back taxes and fines to New York state after a judge denied her claim that she didn’t spend enough time in the state to have to pay taxes there." Willie Nelson worked out an agreement with the IRS and named his new album, "The IRS Tapes." He settled an agreement, as for Martha Stewart, she lost $220,000. Overall, it is a bad idea to skip paying your taxes whether or not you are famous. Skipping your taxes can send you to a bad position such as jail time, or paying the consequences given to you by the IRS.
    (http://blog.nationalpayday.com/taxes/celebrities-tax-troubles/)
    (http://www.examiner.com/ny-in-new-york/taxes-the-series-what-happens-if-i-don-t-pay-my-taxes)

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  6. Taxes can be defined as, "a fee charged by a government on a product, income, or activity. If tax is levied directly on personal or corporate income, then it is a direct tax. If tax is levied on the price of a good or service, then it is called an indirect tax."
    http://www.investorwords.com/4879/tax.html#ixzz15PwPGg5i
    The purpose of taxation is to help fund the government, it's like a cause that you have to donate to because you have to. Tax payers money is used for the public, such as streetlights and street cleaning. Many celebrity stars have abused the power of taxation and have avoided it. They can only get away with it for so long, until they get caught.
    TV star, Martha Stuart, "accumulated a $220,000 tax debt for not paying taxes on her East Hampton, New York, home, which she claimed she spent very little time at and therefore thought she didn’t need to pay taxes on." http://www.womansday.com/Articles/Family-Lifestyle/15-Celebrity-Tax-Evaders.html
    All the stars have their excuses for why they didn't pay their taxes, but from the public eye, it just seems like they didn't want to pay, and thus they didn't pay. The people who suffered from this incident were her family and Stuart's public image. This setback was only one of many and an accumulation of 220k is barely any money to stars such as her. She eventually got past this "misunderstanding" is is not more popular than ever. She is once again involved with Martha Stuart Living, writing books, and even being a guest star on Ugly Betty.
    Avoiding taxes is a risky business and the consequences are ugly. The possibility of jail time could be proposed and also enormous fines that are way more than just the unpaid amount in taxes. Celebrities have no reason to avoid their taxes, since they already have so much money.

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  7. The IRS will send you letters and give you the benefit of the doubt. If you fail to respond to them within 3-4 months, there are a few things that could happen. "IRS could decide to send you a “Substitute For Return“, which is basically them deciding what you made for this tax year and telling you what you owe to them." Or they could send a tax revenue officer to make sure you file and pay your taxes. Finally if you haven't payed your taxes for a while, the would send special agent after you. This could lead to criminal charges for tax evasion. They might also seize your assets.
    MC Hammer has appealing the $625,000 in back taxes. "Hammer, who filed for bankruptcy protection in 1996 and saw his assets liquidated, says he’s already paid the IRS all the taxes he owed." He is claiming that the IRS is charging him for more than what he owes.
    http://www.mytwodollars.com/2009/02/05/what-would-happen-if-i-dont-pay-my-taxes/

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  8. If you do not pay your taxes, it is likely that nothing major will happen to you. In fact, every year, there are about 7 millions of people who don't file their taxes, and the IRS only examines about 158,000 of all those cases. "That comes out to a roughly 2 percent chance of getting caught. Even if the IRS does audit you, the agency probably won't press charges" (http://www.slate.com/id/2216218/). But, that doesn't mean that you are allowed to not file your taxes, in fact you will be caught if you work for a company, since all companies are required to file tax forms for all employees.
    A celebrity that is well known for evading to file taxes, is Martha Stewart, the business women, television host and magazine publisher who made the list of the 20 richest women entertainers in 2007. "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."(http://www.walletpop.com/taxes/famous-tax-cheats/?photo=19).
    But, she hasn't been the only celebrity that has failed to pay taxes in previous years,from Nicolas Cage to Pamela Anderson there have been many celebrities who believe that by being a public figure they have an excuse for not filing their taxes. The chances of these celebrities getting arrested and paying a huge fine is very likely to happen.

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  9. If you don't pay the taxes that you owe the government then the government will be short of money that they could be using to keeping a society nice and safe. If we don't pay our taxes than we are the one's suffering because taxes pay to keep a society going. Policemen are paid to protect the tax payers and policemen are paid by the government with our tax money. So it can get a bit ridiculous when policemen give us silly tickets when we are the ones paying them to make sure that we pay for silly things that we did. On another note, Lil Wayne has not done his taxes in 2004, 2005, and 2007. Now he has a tax lien filed against him for 1.1 million dollars. It's not very good to be owing the government 1.1 million dollars because he can be sentenced to jail and his possessions can be taken from him if he is unable to pay the 1.1 million dollars. Lil Wayne is in jail now, but that is not because of tax evading reasons. I'm sure he has enough money to pay off the 1.1 million dollar tax lien so i don't think he will be in any trouble.

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  10. i forgot to add this.

    http://www.mtv.com/news/articles/1643876/20100716/lil_wayne.jhtml

    i'll talk to you about it wednesday morning.

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  11. If you don’t pay taxes, eventually the IRS will catch up with you and prosecute you for breaking the law; they can seize your possessions and sell them for the amount you owe. “er authority of the Internal Revenue Code, the property. . .has been seized or acquired for nonpayment of internal revenue taxes and will be sold.” (Accessed November 16, 2010 http://www.ustreas.gov/auctions/irs/) Here’s sample language of a Notice of Judicial Sale to pay unpaid taxes owed: Under an Order of Judicial Sale entered in the United States of America v The Taxpayer, et al, Case No. CV 08-07602 PSG (SHx) in the United States District Court for the Central District of California, the United States will offer to sell at public auction property located at 16241 Via Rancho, Riverside, California.
    The city, state, and country is deprived of revenue that keeps them operating—the roads repaired, the parks maintained, public transportation running. Citizens have their safety threatened if there are no funds to pay police, highway patrol officers, firemen, teachers, and government employees. Find an example of a popular movie star who decided he/she wasn't going to pay his taxes. “Marc Anthony, the Latino heartthrob and husband of Jennifer Lopez, wasn't able to sing himself out of a hefty IRS charge. The voice behind "I Need to Know" agreed to pay $2.5 million in back taxes, interest and penalties in 2007, after he failed to file tax returns for five years, according to the Associated Press.” (November 16, 2010 Search: http://abcnews.go.com/Business/Tax/celebrities-failed-pay-taxes/story?id=9939814&page=2)

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  12. Well what happens when you don't pay your taxes are that the IRS comes after you and bothers you until you pay your taxes off, but according to an article, Taxes Schmaxes, by Christopher Beam. In his article he states, "In fact, an estimated 7 million Americans fail to file their taxes every year, and in 2008 the IRS examined only 158,000 such cases." So he is basically saying that the odds of you getting caught are very low, but this is if you pay your taxes on and off because the IRS keeps track of all your tax records. If the IRS find you guilty of not paying taxes in the past 6 years they are entitled to put you in jail. Many movie stars have been busted for not paying their taxes and one that really stood out to me is Nicolas Cage. Since 2002 Cage has about 6.6 million dollars in unpaid tax dollars and he is in trouble for this because of the IRS coming after him. So because of this he has left his 10 million dollar mansion in Las Vegas and having to sell many of his homes he owns around the world.

    http://www.lasvegassun.com/news/2009/nov/03/tax-troubles-force-nicholas-cage-leaving-las-vegas/

    http://www.slate.com/id/2216218/

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  13. No one really likes paying taxes but if you don't "The amount you owe to the IRS, if you don't file, is penalized at 47.5% interest (22.5% for filing late and 25% of the total for not filing."
    (http://www.mytwodollars.com/2009/02/05/what-would-happen-if-i-dont-pay-my-taxes/)
    Avoiding to pay your taxes is also considered a felony that is punishable by $100,000 and five years in prison. It affects you the most if you don't pay for your taxes because it is considered a violation of the law and you may be prosecuted.
    Pamela Anderson refused to pay for her taxes in 2009. "The IRS filed $1,700,173 lien against Anderson with the Los Angeles County Recorder of Deeds."
    (http://www.walletpop.com/taxes/famous-tax-cheats/?photo=2)
    Others such as Al Capone and Nicolas Cage have refused to pay for their taxes.

    http://www.helium.com/items/1758105-what-happens-if-you-dont-pay-your-taxes

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  14. If you don't pay the taxes that you owe the government then the government will be short of money that they could be using to keeping a society nice and safe. If we don't pay our taxes than we are the one's suffering because taxes pay to keep a society going. Policemen are paid to protect the tax payers and policemen are paid by the government with our tax money. So it can get a bit ridiculous when policemen give us silly tickets when we are the ones paying them to make sure that we pay for silly things that we did. On another note, Lil Wayne has not done his taxes in 2004, 2005, and 2007. Now he has a tax lien filed against him for 1.1 million dollars. It's not very good to be owing the government 1.1 million dollars because he can be sentenced to jail and his possessions can be taken from him if he is unable to pay the 1.1 million dollars. Lil Wayne is in jail now, but that is not because of tax evading reasons. I'm sure he has enough money to pay off the 1.1 million dollar tax lien so i don't think he will be in any trouble. Lil Wayne will go to jail again if he doesn't pay off this tax lien. He had a tax lien two years ago but he paid it off and nothing happened.

    http://meetthadealer.com/lil-wayne-may-serve-jailtime-again-for-tax-evasion/

    http://www.mtv.com/news/articles/1643876/20100716/lil_wayne.jhtml

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  15. Evading taxes is against the law, and although it is unlikely that you will be caught, the consequences can be severe. The few cases caught for tax evasion each year are most likely audited, and the IRS may even seize their posessions and sell them for the cost owed for taxes. "the IRS has the power to look at all financial records, garnish wages, freeze bank accounts, and even seize property to pay the money owed to them."
    "http://www.finweb.com/taxes/common-consequences-for-tax-evasion.html"
    It is not worth it to evade doing taxes. Not only are the consequences severe, but the taxes wouldn't be doing their job in helping the economy as well as the people's community.
    There are a hand full of celebrities who have been caught for tax evasion. People often wonder why celebrities with so much money don't bother to do their taxes. One celebrity in partiularwas is Martha Stewart, who "accumulated $220,000 in tax debt for not paying taxes on her home in the Hamptons. The reason? She claimed she spent so little time there that she thought it didn’t count."
    "http://blog.learnvest.com/financial-entertainment/from-fines-to-jail-time-10-celebrities-found-guilty-of-tax-evasion"

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  16. If you fail to pay your taxes you can have a "failure to file or (FTF) penalty is assessed by the IRS at a rate of 5% per month or partial month up to a 25% maximum. The failure to pay (FTP) penalty is assessed by the IRS at a rate of 0.5% per month or partial month up to a 25% maximum" (http://www.goodfinancialcents.com/file-tax-return-what-happens-when-you-dont-penalties/). You can also go to jail for Criminal Fraud for tax evasion or be fined for either civil fraud, negligence, or frivolous return.

    Willie Nelson had "16 million in tax debt in 1990, he signed over to the Internal Revenue Service the profits from a new album, 'The IRS Tapes: Who'll Buy My Memories?'" (http://www.spinner.com/2009/10/21/celebrity-tax-evasion/).

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  17. "Tax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law. By contrast, tax evasion is the general term for efforts not to pay taxes by illegal means. The term tax mitigation is a synonym for tax avoidance. Its original use was by tax advisors as an alternative to the pejorative term tax avoidance. Latterly the term has also been used in the tax regulations of some jurisdictions to distinguish tax avoidance foreseen by the legislators from tax avoidance which exploits loopholes in the law."
    (http://en.wikipedia.org/wiki/Tax_avoidance_and_tax_evasion)
    A celebrity who got caught with an tax avoidance/ evasion was a country singer by the name of Willie Nelson. He was filed for tax evasion on the H&R Block commercial during the Super Bowl 37 in 2003. The reason why Willie Nelson was interested in doing the commercial was because he could pay for his accountant's mistakes for missed taxes. The IRS fined Willie Nelson a mountainous amount of 32 million dollars. But, as let off to pay 16 million dollars, but since he did not have the money to pay for such a large amount he made an album called "The IRS Tapes – Who'll Buy My Memories?"
    (http://money.cnn.com/2003/02/18/pf/taxes/q_celebritytrouble/)

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  18. If you dont pay your taxes, the IRS will come after you. Especially if you owe 16.7 million dollars, like Willie Nelson did in 1990. But morality pays off. Willie Nelson is notorious for running the Bridge School Benefit, a concert whos profits go to help disabled people. Not to mention people just enjoy his music. The IRS seized most his assets and began auctioning them off. He also released a series of videos whos profits went to the IRS. People purchased Nelson's items and gave them back to him for no charge. So if you don't want to pay your taxes, write entertaining music and help out at charities. That way, people will buy your stuff for you.
    http://guanabee.com/2010/04/celebrity-tax-evaders/

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  19. What happens if you don't pay your taxes is something that I feel most people will come to a conclusion to, if given time: someone will come after you. More specifically, the "someone" is better known as the IRS. The reason being is that when you don't pay taxes, you are essentially hurting the entire country as a whole. You might reason that you, as one person with a medium salary alone, cannot possibly hurt America by yourself, just because you did not pay your taxes right? Well, there are celebrities out there who think just like you. For example, "From 2007 to 2009, Nicholas Cage accumulated a debt of over $12 million in back taxes". Now it seems like more of a big deal. Eventually he lost his home (though he probably can go live in the 2 or 3 spare that he owns), certainly not a fair exchange for not paying his taxes. Cage isn't the only celebrity avoiding paying taxes either. Taxes are here, not to make you lose money, but to help government funds and projects. The money that you pay, goes straight into the communities around you, helping fix that pothole you always complain about and ensuring that your children have the best education possible. Greed and self interest prevent not only wealthy people, but people in all tax brackets, to look for loopholes where it will save them that small percentage of their salary. Surely, one can manage to pay taxes, if not to better our nation, but to also the community in which they live in. I mean, you do it on almost every purchase you make, why avoid this one?

    http://blog.learnvest.com/current_events/from-fines-to-jail-time-10-celebrities-found-guilty-of-tax-evasion-835/?gallery=151&pid=2013#pid-2013

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  20. If you fail to file your taxes, the IRS seeks to find you until you pay. The economy suffers when people do not pay their taxes.
    Yesterday, Wesley Snipes showed up at a Pennsylvania minimum security prison to serve a three year sentence for tax evasion. He was convicted in Florida for not filing taxes from 1999 to 2001. Wesley Snipes was a star in the "Blade" series. "Snipes, 48, was convicted in an Ocala, Florida court for willful failure to file tax returns from 1999 through 2001." (http://news.yahoo.com/s/nm/20101209/en_nm/us_crime_snipes_2).

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