A Brief History
On October 17, 1931, Mobster Al “Scarface” Capone was convicted of income tax evasion and later sent to Alcatraz Federal Prison. Authorities had long sought to arrest and convict this famous gangster for the murders, extortion and bootlegging he was involved in, but they never had enough evidence. Finally, law enforcement hit on the idea of going after him on income tax evasion.
It is not a surprise that a career criminal would have income-reporting irregularities, but what about seemingly non-criminal people? Here we look at 9 celebrities, not from the criminal underworld, who have had problems with the Internal Revenue Service (IRS) or other tax agencies. Who would you add to the list? (History and Headlines Note: The uneven and unfair application of tax law and prosecution for tax violations are subjects that infuriate many Americans, including the author.)
UPDATE, October 17, 2018: The current President of the United States, Donald J. Trump, has recently been accused by the New York Times of engaging in a lifelong effort to avoid paying taxes, starting with his father using his son, Donald, as a tax shelter as an toddler! Trump along with his siblings have allegedly saved almost a half billion dollars by using questionable tax evasion tactics that may or may not be legal. Additionally, Trump’s son in law, Jared Kushner, is also reported to have paid little or no income tax for many years. Details will presumably follow once the Mueller led Russia Election Meddling investigation is over or when the State of New York decides to take civil or criminal action regarding the tax avoidance by the First Family.
UPDATE, October 15, 2019: While Congress and the American public still do not have access to President Trump’s tax records, recent court rulings against the President make such disclosure seemingly just a matter of time, though how much time is unknown! Impeachment proceedings may also hasten release of President Trump’s tax records, and again, this possibility is no sure bet at this time.
9. Lindsay Vonn, 2012.
The famous skier Lindsay Vonn and her ex-husband got zapped with a $1.7-million tax lien in 2012. The beautiful Olympian said she had let “someone else” take care of her finances but that would no longer be the case. Honorable mention to tennis star Boris Becker who claimed to be residing in Monaco (a tax haven) while really living in Germany. He had to pay $3 million in back taxes for 1991-1993.
8. Willie Nelson, 1990.
This grizzled country singer and famous marijuana advocate must have been so mellowed out from smoking too many joints that he forgot to pay his taxes because in 1990 he was hit with a back taxes bill of $16 million. The sum was so great that he had to go on a tour specifically to make money to pay it. Seriously though, when you make enough money to owe $16 million in unpaid taxes, it is hard to feel sorry for you. Why do some people go to jail for owing many millions less, and Willie does not go to jail for owing much more? Only the tax fairy knows. Honorable mention to Martha Stewart who had to pay $220,000 in back property taxes she had not paid for a residence because she “did not spend much time there.”
7. Nicolas Cage, 2009.
Born Nicolas Kim Coppola, this famous actor blames his tax problems on his business manager whom he accused of mismanagement. The result was a tax bill of $6.2 million in back taxes for 2007 and another $350,000 for the years 2002-2004. Cage, who earned $40 million in 2009 (yes, more than the author made) had owned the famous LaLaurie House in New Orleans,“ the Most Haunted House in America,“ but that had to be foreclosed on as a result of his financial woes. He also owned numerous other houses, a couple castles (real ones) and his own island in the Caribbean. History and Headlines Trivia: In 2011, Cage sold his Action Comics #1 for $2.16 million to help pay his tax bills. He had bought it in 1997 for $110,000. Nice profit!
6. Marc Anthony, 2007, 2010.
Though Puerto Rican, this Latin singer was actually born and raised in New York City. This winner of 2 Grammys who has sold over 12 million albums has been married to a New York police officer, a former Miss Universe and Jennifer “J-Lo” Lopez. He not only cheated on J-Lo but apparently on his taxes as well because he received a back tax bill of $2.5 million for 2007, and in 2010 he was hit with a tax lien of $3 million. (History and Headlines Note: The allegations that Marc Anthony cheated have been denied by him and are conjecture.)
5. Pete Rose, 1990.
Not only did he gamble on baseball games, but Pete Rose, baseball’s all-time hits leader, also failed to report income from signing baseballs and photographs and filed false returns for which he served 6 months in jail. He also had to pay $266,041 in back taxes. Honorable mention to Darryl Strawberry.
4. Leona Helmsley, 1983-1989.
Leona Helmsley owned hotels and real estate worth billions of dollars. Known as “The Queen of Mean” for her miserable disposition and bad temper, she was a piker who stiffed contractors on $8 million in bills for renovating a house she had bought. Those contractors sued for their fees and reported that Helmsley had forced them to bill her hotel expense accounts to reduce her taxes. Though convicted of tax evasion, she only served 19 months of a 16-year sentence. She sums herself up best, “We don’t pay taxes. Only the little people pay taxes.” Hopefully not all filthy rich people think that way.
3. Wesley Snipes, 2006.
Snipes, a well-known action-adventure movie star, was accused of income tax evasion in 2006 for, among other things, filing false claims for tax refunds of $4 million in 1996 and $7.3 million in 1997. In an innovative way to send oneself on the fast path to jail, Snipes also sent the IRS 3 worthless “bills of exchange” for $14 million. It seems Snipes had been given bad tax advice by shysters who convinced him that U.S. citizens do not need to pay income tax on money outside the U.S. (they went to jail, too). Snipes then tried the old “I am not a U.S. citizen” trick, but that did not work because he had been born in the USA. Snipes was convicted of 3 counts of failing to file tax returns and sentenced to 3 years in prison, which he served. Honorable mention to actress Sophia Loren.
2. Spiro Agnew, 1973.
Charged with bribery and tax evasion, Spiro Agnew, the sitting Vice President of the United States, was forced to resign his office and make a plea of no contest (“nolo contendere”) to avoid jail. His crimes were committed during his tenure as Governor of Maryland and as Vice President. Honorable mention to Jesse Jackson, Jr., former U.S. Representative from Illinois.
1. Richard Nixon, 1974.
Even the President of the United States is not immune to tax problems. Under fire during the Watergate scandal investigations, Nixon was found to have made use of government resources and to have accepted numerous gifts that he had not declared as income. Although not prosecuted, he was obliged to pay $465,000 in back taxes. If you owed the government almost half a million in unpaid tax, don’t you think that you would be prosecuted? Honorable mention to former Senator Tom Daschele of South Dakota who failed to report the value of a car and driver for a few years, which amounted to back taxes of $128,203 plus interest.
Question for students (and subscribers): Do you think we pay too much in taxes? Please let us know in the comments section below this article.
Your readership is much appreciated!
For more information, please see…
Hammer, Richard. The Helmsleys: The Rise and Fall of Harry and Leona Helmsley. NAL Books, 2017.
Lowrey Esq, Donald E. Back Taxes & Tax Debt: A Consumer’s Guide to Understanding IRS Tax Debt and What Can Be Done About It. Donald Lowrey, 2014.
Schoenberg, Robert J. Mr. Capone: The Real – and Complete – Story of Al Capone. William Morrow Paperbacks, 1993.
The featured image in this article, a mug shot of Capone in Miami, Florida, 1930, was created by a government unit (including state, county, and municipal government agencies) of the U.S. state of Florida. It is a public record that was not created by an agency which state law has allowed to claim copyright and is therefore in the public domain in the United States.