Outlandish Tax Cheats

Many taxpayers hedge their bets when filing their tax returns but most of us are careful to pay our fair share and stay on the sunny side of the IRS.  Not so for these eight Americans who thought they could get away with cheating IRS. Read on to see how their attempted tax evasion landed them in trouble with IRS; as Benjamin Franklin stated, “ in this world nothing can be said to be certain, except death and taxes.” 

While some tax issues arise from genuine mistakes made by people who don’t fully understand the nuances of their tax returns, other tax actions are more difficult to justify, and they arise across all sizes of businesses, from Sole Proprietors to major Corporations. 

Here are some of the recent most notable tales of tax cheats.

Darryl Strawberry

The former right fielder for the New York Mets and NY Yankees went to court in February of 1995 and pleaded guilty to one count of tax evasion. According to the 32-year-old at the time, he was aware that he hadn’t paid over $100,000 of owed federal taxes when he failed to report $350,000 in income from autograph signings and other promotional appearances. 

It wasn’t until 2015 that IRS was able to successfully collect $1.3 million to cover Strawberry’s ongoing debts — 10 years after the initial court case. For restitution, the agency auctioned off the annuity that the baseball star was owed for his contract extension with the New York Mets. 

Chris Tucker

Chris Tucker proved that tax evasion was no laughing matter in 2014 when he went to court for more than $14 million in unpaid taxes. IRS gave Tucker a tax lien of $2.5 million as a result, raising his debt substantially. 

Eventually, Tucker and his lawyers reached a resolution and settled his phenomenal tax debt privately with IRS. 

Lindsey Vonn

In 2012, IRS issued a $1.7 million tax lien against skiing champion Lindsey Vonn, who owed a considerable amount in back taxes. Vonn stated that she was “disappointed” with the situation and that she had been relying on someone else to handle her taxes up until that point. 

Although Vonn wasn’t the only major athlete to fall victim to tax issues during her career, she took the right approach by nipping the situation in the bud as quickly as possible.  

Willie Nelson 

Willie Nelson is known his amazing music career, however less known is his massive tax debt. In February of 1993 he settled one of the most significant tax bills in history. Nelson came to terms on a $16.7 million bill with IRS, after the government showed that his “tax shelters” were not valid. Much of Nelson’s property was sold at auction to cover some of the debt. In a stunning show of loyalty and devotion, many pieces were bought by friends and supporters who returned them back to Nelson. 

Eventually, the music legend settled his tax debt in an agreement with IRS, coming up with a “creative payment plan” that suited both parties. 

Wesley Snipes

One celebrity who seems to have had constant run-ins with the IRS over the years is Wesley Snipes most famous for his role as “Blade”.  In 2018, he lost a case after attempting to argue that he couldn’t pay the massive $23.5 million debt owed to the government. Snipes offered to pay around $842,000 in an attempt to wipe out the debt, but IRS refused the payment and is continuing to demand that Snipes pay the full amount owed. 

IRS reported multiple tax infractions from Snipes dating back to 1999. In 2008 Snipes was convicted of 3 misdemeanor counts of failure to file tax returns, and served time on 2 sentences. Snipes avoided another $7 million in taxes after he proved his belief in an accountant that told him he wasn’t legally required to pay taxes. Note: When it comes to financial matters, certified public accountants (CPAs) cannot use ignorance as a defense if their clients’ tax returns are later investigated.

Pete Rose

Pete Edward Rose holds more records in the game of baseball than any other player but it is his run-ins with authorities that dominate his legacy.  From illegal gambling on baseball games while managing, to run-ins with IRS, Rose did not get away with cheating the system. In 1990, Rose pleaded guilty to failing to report more than $350,000 in income from his appearances at public events, autograph signings and memorabilia sales. The government chose to dismiss a more serious charge of tax evasion following the plea.

Rose managed to skip extensive jail time for his tax issues and served only 5 months instead. He was also required to pay a $50,000 fine, alongside his back taxes and interest fees. 

Leona Helmsley

Leona Helmsley, dubbed “The Queen of Mean” has had an off putting reputation throughout her lifetime. She was often in trouble with the media and faced her share of repercussions from IRS. When charged with tax evasion, a former employee claimed that she had said there was no need to pay taxes. According to Helmsley, taxes were only for “the little people.”

Eventually, Helmsley’s case went to trial and she was convicted of 33 counts of felony fraud. Originally sentenced to 16 years in prison and a fine of $7 million, her sentence was reduced to 4 years on appeal, of which she served only 21 months. 

Martha Stewart

Despite her home maker persona, knack for design and green thumb, this home and garden icon was sentenced to prison in 2004 for insider trading. At that time she was also required to pay more than $220,000 in back property taxes and penalties to New York for the home she held there.

According to Stewart, she didn’t realize that she needed to pay taxes on the New York property because she didn’t spend a lot of her time there. We’re certain, however, that it was beautifully landscaped and decorated.

Tax issues can be very serious, regardless of your business size. If your business owes back taxes, and you cannot afford your current tax bill, or are facing another legal tax matter, don’t risk ending up like these celebrities. Contact Milikowsky Tax Law for expert legal support. Our experienced team of tax attorneys will be your expert ally in tackling your most complex tax law issues.