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10 Recent Celebrity Tax Scandals

Celebrity Money
10 Recent Celebrity Tax Scandals

In recent years, federal authorities have been targeting the entertainment industry heavily, penalizing stars that fail to pay federal income taxes. In the U.S. the government has the right to place a levy on your bank accounts, place a tax lien on your home and seize all other valuable property. Offenders may be subject to penalties, fines and even imprisonment. A prime example, Wesley Snipes  was sentenced to 3 years in prison for tax evasion back in 2008. There are no shortage of stars being annually exposed for nonpayment of state and federal taxes.

In 2011, TV personality Tamar Braxton publicly voiced her opinion regarding celebs that fail to pay their taxes in ‘Black Enterprise’ magazine, stating, “I don’t understand when people say, ‘I owe $100,000 in taxes’ or ‘I owe $8 million in back taxes.’ What? How [does] that work? Pay your taxes and keep the IRS off your behind!” This comment might be why the press is having field day with the fact that her music mogul husband is one of the first stars of the New Year to be hit with a multi-million dollar tax lien. Athletes, musicians, actors and star estate representatives have been forced to settle their tax debt in short order, or risk losing all that they (or their clients) have worked hard for.

Here is a rundown of the most recent celebrity tax scandals:

Vince Herbert

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In January, the IRS slapped music producer and manager Vince Herbert with a federal tax lien for more than $3 million. According to recently published court documents, he has been ordered to pay $3,325, 107.70 for back taxes owed from 2010-2012. Reportedly, Herbert neglected to pay $66,315.30 in 2011 and $2, 267, 845.97 in 2012. The total balance due also includes $990,946.43 in taxes owed for 2013.

Vince is popularly known for being married to TV personality and singer Tamar Braxton and for discovering Lady Gaga. He has flaunted his extravagant lifestyle alongside his wife while appearing on WE TV’s reality shows ‘Braxton Family Values’ and ‘Tamar & Vince’. The couple recently celebrated the birth of their first child (Logan). Tamar received 3 Grammy nominations at the 2014 Grammy Awards for her successful album ‘Love & War’ released in 2013. Her famous older sister, songstress Toni Braxton, has had her own highly publicized financial struggles and filed for bankruptcy in 1998 and 2010.

Tramar Lacel Dillard aka “Flo-Rida”

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A federal tax lien was filed on Jan. 2 for rap artist Flo-Rida, who reportedly owes $1.9 million to Uncle Sam. He owes $343,317.03 for 2009, $10,245.41 for 2010, $844, 093.00 for 2011 and $681,411 for 2012. With a total of $1,879.067.25 million owed, a lien has been placed against his $1.6 million South Florida estate and his recording studio.

No stranger to tax debt, the rapper shelled out $1 million in 2013 for an unpaid tax levy from 2009. His bad luck does not end there, as he recently filed a court claim seeking the $170,000 he lost in a 2009 FL real estate deal. Flo-Rida is best known for his hit singles ‘Get Low’ featuring T-Pain and ‘Right Round’ featuring Kesha. His next studio album, “Perfect 10’, is scheduled to be released later this year.

Manny Pacquiao

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Fighter and politician, Manny Pacquaio, learned he was on the hook for a tax lien to the tune of over $18 million in December of 2013. He reportedly skipped out on paying taxes from 2006-2010. The yearly breakdown of taxes owed includes:

2006 — $1,160,324.30
2007 — $2,035,992.50
2008 — $2,862,437.11
2009 — $8,022,915.87
2010 — $4,231,999.01

Manny had already been battling tax evasion problems in his native country, The Philippines, for a total balance of $50 million owed for 2008 and 2009. His bank accounts were reportedly frozen and he had been served with a lien against his property in Manila. His total debt due in the U.S. is $18,313,668.79. However, the lien against his U.S. properties was lifted in December. Manny is the subject of a new documentary premiering at the 2014 SWSX Film Festival that highlights his boxing achievements. He is expected to fight WBO welterweight champion Timothy Bradley in April at the MCM Grand in Las Vegas for a rematch for a guaranteed $20 million.

Dionne Warwick

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Soul Music Legend Dionne Warwick filed for bankruptcy on March 21, 2013 to protect her assets and avoid a tax lien. Warwick reportedly owed $10 million in federal and state tax debt. The hit song-maker and 5 time Grammy award winner was reportedly down to her last thousand dollars in cash when she filed for Chapter 7 bankruptcy. Warwick is the older cousin of the late Whitney Houston, best known for her hit songs ‘Don’t Make Me Over,’ ‘Walk On By’ and ‘That’s What Friends Are For’. The 72-year-old singer is back on tour performing in Europe and South America. She has a new single, a duet recorded with Billy Ray Cyrus for the Do The Write Thing’s National Campaign to Stop Violence, hitting the radio on Feb. 3.

Lindsay Lohan

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The IRS released a tax lien from Lindsay Lohan’s bank accounts in December of 2012 after she resolved a $93,701.57 tax bill from 2009. Even after friend and actor Charlie Sheen gave her $100, 000 toward the debt, she still owes $140,203.30 in back taxes from 2010 and $56,717.90 from 2011. Despite major financial problems, Lohan reportedly turned down lucrative promotional appearance offers and the opportunity to perform on ‘Dancing with the Stars’.
No stranger to controversy, Lohan now better known for her arrests record and drug rehab stints than her acting. She is set to star in a self-titled reality docu-series which will premiere March 9 on OWN. The deal was reportedly worth $2 million. In January, she also announced plans to produce and star in film ‘Inconceivable’ during a press conference.

Nicolas Cage

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Though he was named in Forbes magazine as one of Hollywood’s most powerful celebrities, Nicolas Cage failed to pay the IRS $14 million in taxes. He is currently suing Samuel Levin, his former business manager, blaming him for financial mismanagement. His tax debt has resulted in four $6 million federal tax liens filed against his properties, 6 foreclosed estates, multiple property short sales and a $629,934.64 tax penalty. He also lost his legendary memorabilia collections, including possessions once owned by Elvis.

Though Cage reportedly earned over $150 million between 1996 and 2011, earning an estimated $40 million in 2009 alone, he also spent his fortune lavishly. Purchasing over 15 estates (including a castle in England worth $8 million), a private island, 4 luxury yachts, 30 motorcycles, a garage full of luxury cars, a private jet for $30 million, exotic pets, art and jewelry. Cage was said to have arranged payment with the IRS and has starred in 12 films since his financial ordeal began to help pay off his massive debt.

Michael Jackson’s Estate 

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The IRS charged Michael Jackson’s estate $702 million in federal taxes and penalties in August of 2013, claiming that the value of Jackson’s assets was misrepresented. In 2009, the estate claimed a taxable value of $7 million, but the IRS claimed the valuation was off by $505.1 million. Jackson reportedly amassed a significant amount of debt before his untimely passing in 2009, which was paid off by his estate. Estate representatives claim the IRS has already received over $100 million in taxes. Nothing has to be paid unless a court ruling validates the IRS claims and awards a judgment. Jackson’s fortune was left to his 3 children (Michael Joseph, 16, Paris, 15, and Prince Michael, 11) and his mother.

Lauryn Hill

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Grammy-winning performing artist Lauryn Hill was sentenced to serve a 3-month prison sentence for tax evasion in May of 2013. The former ‘Fugees’ singer owed over $1 million in back taxes when she pled guilty to tax evasion. A total of $1.8 million was unpaid in 2005-2007 and $2.3 million was unpaid in 2008-2009. She also owed $440, 000 in state tax. Hill claimed she was unable to pay the taxes owed after leaving the music industry to go “underground”. Her attorney fought for probation, but the judge sent her to federal prison instead.

Despite claims of leaving the music industry to protect herself and her children, Hill has since resumed her singing career after her October prison release. She signed a $1 million record deal with Sony, released a single and is set to begin touring. In a statement to her fans through her blog, Hill confirmed that she only signed the recording deal to pay off her tax debt. Her 1998 solo album, ‘The Miseducation of Lauryn Hill’, earned her 10 Grammy nominations. Hill won in 5 categories, including one for album of the year.

Mary J. Blige

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Hip-hop soul singer Mary J. Blige was slapped with a $3.4 million tax lien from the IRS in 2003 in May of 2013. She owed more than $547,000 for 2009 and more than $2.2 million for 2010. The 9 time Grammy winner also owed $901, 769.69 to the state of New Jersey in back taxes. That brought the total to $3,426,255.43 owed in unpaid taxes. The IRS claims Blige failed to pay taxes on income earned between 2009 and 2011. Her current financial woes also include a lawsuit alleging she defaulted on a $2.2 million bank loan.

Blige’s husband of 9 years and manager, record producer Martin ‘Kendu’ Isaacs, has been the subject of public resentment from fans who believe he is to blame for financial mismanagement. Blige recently collaborated with 2014 Grammy nominated group ‘Disclosure’ and recorded a new version of their hit single ‘F is For You”. She is scheduled to perform in the Essence Festival in July.

Joseph Cartagena aka Fat Joe

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In August of 2013, South Bronx rapper Fat Joe turned himself in to authorities to begin his 4-month prison sentence for tax evasion. He owed more than $1 million in unpaid taxes and penalties on income earned between 2007 and 2010. A Miami Beach resident, the rapper was sentenced in the state of New Jersey because his corporations (including his label Terror Squad Productions) are based in Somerville. Though he faced a 2-year sentence, he took a plea deal. He was allowed to serve his sentence at a federal detention center in Miami and released early on Thanksgiving Day for unspecified reasons. Fat Joe is best known for his hits songs ‘Lean Back’ and ‘What’s Luv’.

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