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Famous Celebrity Tax Troubles

As difficult as it may be for Americans to believe, celebrities are really just human beings. In the U.S., though, we glorify Hollywood, athletes, musicians and entertainers of all sort.  We tend to place celebrities on a pedestal.  We view them as nearly superhuman compared to normal citizens. Might they have problems? Certainly, but whatever problems they might have, they aren’t anything that a superhuman couldn’t easily handle without breaking a sweat. We see celebrities as being basically above the hassles, headaches and pesky issues which torment us mere mortals.  This view, however, isn’t the truth. In this post we’ll take a look at several celebrity tax headaches.

The real truth is that not celebrities have just as many problems.  In many cases they have problems which are far greater and far more consequential than non-celebrities. Many, many publicl personalities get into trouble with the IRS.  Quite a few have even had to significantly alter the course of their careers because of such trouble. In this post, we will introduce you to several such prominent figures.  Each has had significant issues with taxes at some point in the past.  We’ll then discuss how these issue. Sometimes, being a celebrity means being burdened with troubles more severe and draining than most  

Celebrity Tax Poster Child Nicolas Cage 

Along with roles in prominent, blockbuster films such as National Treasure and Con Air, Nicolas Cage may very well be equally remembered for his extreme spending habits. In fact, Cage is the poster child for  celebrity tax troubles.  At one point, Cage was among the highest paid actors in Hollywood.  Throughout his career, his earnings went to a host of luxurious homes and expensive acquisitions. Many of his purchases were seldom used and often lacked any functional purpose.

For example, there was the dinosaur skull he purchased for $276,000. The actor has also been saddled with multiple tax liens and hefty tax bills.  On many occasions he’s taken acting jobs to cover these costs. At one point, in 2012, Cage owed as much as $13 million in back taxes.  To his credit Cage has gradually paid down this massive debt with various payments. He made a lump sum payment of over $6 million in 2012.  By doing so, he slashed his existing bill nearly in half.  That payment was also preceded by a much smaller payment of approximately $360,000 made to cover back taxes from the early 2000s.  

The IRS has hit Cage repeatedly.  Nonetheless, Cage’s reckless spending doesn’t seem to have subsided.  Today, he continues to take roles to chip away at his bills. 

Stephen Baldwin 

Yet another celebrity tax saga centers on Stephen Baldwin, brother of well-known actor Alec Baldwin.  New York State Taxation CID arrested brother Stephen in 2012.  The charge was felony tax evasion. The State tax authorities alleged that Baldwin had willfully failed to file state income taxes during the years 2008 – 2010. Baldwin, has had his share of financial difficulties during the course of his career.  He even owed upwards of $350,000 to New York State at the time of his arrest. Baldwin made a good faith payment of $100,000 to the state immediately following his arrest in order to prove that he was serious about resolving the debt.  

Ultimately, Baldwin avoided jail time by pleading guilty and working out a payment agreement with New York State. The judge presiding in Baldwin’s case allowed him to walk free provided that he settle his New York State tax debt within one year. 

Darryl Strawberry 

At one time, former New York Mets baseball player Darryl Strawberry was among the most talented and celebrated professional baseball players in Major League Baseball. An eight time Major League Baseball all-star selection, in 1988 Strawberry finished 2nd in voting for  “most valuable player” when he led the National League in home runs with 39. Strawberry distinguished himself as a professional ballplayer.  Nonetheless, Strawberry hasn’t been without his share of personal troubles. Those include serious tax and financial troubles.

In 2014, Strawberry’s deferred compensation from an e prior MLB contract was up for auction.  The auction wasn’t of the voluntary kind.  Rather it was imposed by the IRS to settle some of his back tax debt. Strawberry had decided to defer receiving a portion of his $7 million contract with the Mets until after retirement.  The initial plan was to distribute the money regularly over the course of 30 years. Unfortunately, the Internal Revenue Service wouldn’t play ball.  Instead, Strawberry’s tax troubles made the compensation fair game for the IRS. 

Strawberry also got into trouble with the taxman when he failed to report income from autograph signings and other media appearances. There was no jail time for Strawberry for those failures to report.  Nonetheless, Strawberry still received a sentence which involved probation, community service and home confinement.  He was also ordered to pay back more than $350,000 in back taxes, penalties and interest.

Call A NYC Tax Attorney For Help

As was stated at the outset, celebrities are not only subject to the same types of problems as everybody else, in many cases their troubles are much more serious. These three well-known public figures got themselves into a whole bunch of trouble with the taxman, and went through significant hardships to have their tax troubles taken care of. Even though you may not have tax issues on the magnitude of the celebrity tax problems discussed in this article, know that the firm of Mackay, Caswell & Callahan, P.C. is capable of resolving your tax issue, no matter how severe it may be. If you need assistance with a tax matter, don’t hesitate to contact our top tax attorney in NYC and we will get started helping you today! 

Image credit: Vicky Hugheston