Free Consultation: 858.450.1040 Payment | Client Login

MENUMENU
  • EDD
  • IRS
    • IRS Notices – What They Mean
  • About Us
    • MEET THE TEAM
    • PRACTICE AREAS
    • CONTACT US
  • TAX LAW & EDD RESOURCES
    • SMALL BUSINESS OWNERS TAX LAW GUIDE
    • EDD & IRS AUDITS
    • CRIMINAL TAX
    • SAN DIEGO TAX ATTORNEY
    • Orange County Tax Attorney Services
    • TAX BALANCE
    • INNOCENT SPOUSE RELIEF
    • OTHER TAX LAW MATTERS
    • SALES TAX AUDITS
    • UNFILED TAX RETURNS
    • OFFERS IN COMPROMISE
    • CALIFORNIA INCOME TAXES
    • INTERNATIONAL TAX
    • TAX COLLECTIONS
    • CORPORATE | BUSINESS TAX
    • PAYROLL TAX AUDITS
    • TAX LEIN
    • FAQs
  • SBA Loan Resources
    • PPP FORGIVENESS DENIAL APPEAL
    • SBA Criminal Defense
    • FAQs
  • RESOURCES
    • Blog
    • VIDEO LIBRARY
Home > Blog > Top 13 Worst Celebrity Tax Cheats in History

Top 13 Worst Celebrity Tax Cheats in History

November 26, 2020

Celebrities really are just like us. However, their missteps live under the spotlight of public scrutiny. Although they live in the public eye, they are just as responsible to live by the same rules and regulations the rest of us do.

As Benjamin Franklin once said, “in this world, nothing can be said to be certain, except death and taxes.” This list shows that some celebrities chose to learn the hard way that they’re not above the law.

Here are the top celebrity tax cheats who have been caught committing tax evasion, and how they did it.

Stephen Baldwin

(Photo by Jason Kempin/Getty Images)

Stephen Baldwin

In March 2013, actor Stephen Baldwin pleaded guilty to not paying New York state income taxes in 2008, 2009, and 2010. This totaled up to $400,000 in back taxes. Baldwin claimed that he had not purposely avoided paying taxes, but he had received bad advice from his lawyers and accountants that landed him in hot water. He was able to avoid jail time by agreeing to pay back the owed debt within one year, which he successfully managed.

 

Nicholas Cage

IRS filed both a $6.2 million tax lien against Nicolas Cage in July 2009 and a $6.7 million tax lien in December 2009. Reportedly, he had previously blown over $150 million on luxury cars, mansions, a yacht, a private plane, and even a pyramid tombstone. Cage paid off the $6.2 million in 2012 and has continued taking on new film roles to pay off his debts.

DMX

Rapper DMX, whose real name is Earl Simmons, pleaded guilty to a single count of tax fraud after withholding $1.7 million in taxes over a five-year period. He initially pleaded not guilty and claimed that the “people in charge” of him were responsible for his tax fraud between 2010 and 2015. However, five months after being arrested for the charges, he admitted, “I’m responsible… I failed to file taxes.”

Teresa and Joe Giudice

The Giudices were indicted on 39 counts of fraud and tax charges in July 2013. One of the many charges was directed against Joe for failing to file tax returns from 2004 to 2008. During this period, he was suspected to have earned $1 million.

Additional charges resulted when Teresa lied under oath to withhold her full salary from the hit Bravo reality show The Real Housewives of New Jersey, in addition to other various business ventures. Joe similarly lied under oath in denial of failing to file his tax returns. After an initial attempt to plead not guilty, they changed their plea to guilty in March 2014.

All in all, Teresa pleaded guilty to four counts and Joe pleaded guilty to five counts—including not filing his tax returns. In October 2015, Teresa was sentenced to 15 months in prison and Joe to 41 months in prison in addition to being ordered to pay $414,588 in restitution. The judge allowed the couple to offset their sentences so their four young daughters would have a parent at home.


Willie Nelson

Legendary country singer Willie Nelson faced $32 million in back taxes from IRS in 1990. With the help of his lawyer, his debt was reduced to only $17 million, which unfortunately, he still was unable to pay. As a result, IRS seized almost all of his assets to auction off and pay off his debt.

 

The government agency also allowed him to record his album Who’ll Buy My Memories? (The IRS Tapes) to raise funds to repay his debt. He eventually managed to pay off the last of his debt in 1993.

(Photo by Willy Sanjuan/Invision/AP, File)

Mike ‘The Situation’ Sorrentino

In January 2018, the Jersey Shore star pleaded guilty to tax evasion. Sorrentino was found guilty of failing to pay taxes from 2010 to 2012 on nearly $9 million of income. In October 2018, he was sentenced to eight months in prison which he began serving in January of 2019.

(AP Photo/Mel Evans)

Lauryn Hill

In July 2013, the singer and rapper served three months in prison after failing to pay over $1 million in taxes. She pleaded guilty to $1.8 million in tax evasion from 2005 to 2007. She pleaded that she had intended to pay her taxes but her break from music left her unable to do so. In May 2013, her attorney claimed that she had paid $970,000 in penalties and unpaid bills before her prison sentence.

Joe Francis

The Girls Gone Wild founder pleaded guilty to tax evasion in 2009. Francis withheld $500,000 in interest income in addition to bribing jail workers, supposedly in exchange for food. He was ordered to pay $250,000 in restitution and was sentenced to 301 days already served and one year of probation.

(Photo by Chris Hondros/Getty Images)

H. Ty Warner

In October 2013, the Beanie Babies creator pleaded guilty to one account of tax evasion. It was found that between 1996 to 2007, Warner withheld $24.4 million in interest income, which equated to $5.6 million in taxes. Additionally, he did not file annual “FBAR” reports to the U.S. Treasury on his foreign accounts. 

His plea deal consisted of his agreement to pay $16 million in back taxes in addition to a $53.5 million penalty. Luckily, Warner was able to avoid the suggested jail time of 46 to 57 months. Instead, he served two years of probation and was ordered to complete 500 hours of community service.

Richard Hatch

Survivor winner Richard Hatch was sentenced to 51 months in prison in May 2006 after a jury found him guilty of tax evasion and failing to report over $1 million of earnings in 2001. In October 2009, he was released from jail and transitioned to supervised release.

In 2011, Hatch was sent back to jail after failing to refile his 2000 and 2001 taxes. Hatch served an additional nine months and was released in December 2011.

pete rose

Pete Rose

Cincinnati Reds baseball star and then later manager, Pete Rose, was found guilty of filing false income tax returns in 1990. During the investigation of his false tax reports, Rose was found guilty of betting on baseball games and failed to report earnings from personal appearances and memorabilia. As a result, Rose is now banned from the MLB. In his trial, the court sentenced him to a fine of $50,000 and five months in prison.

A few years later in 2003, Pete struck out with IRS when they placed a civil charge of $154,000 for failure to pay taxes correctly.

 

martha stweart

Martha Stewart

In 2001, Martha Stewart sold her shares of ImClone Systems right before their value sank. She avoided losing over $40,000 by selling the shares. The Securities and Exchange Commission (SEC) indicted Stewart for insider trading, and she was found guilty in 2004. 

The star of Martha Stewart Living claims her broker, Peter Baconovic of Merrill Lynch, advised her to sell her stocks when she did—which still constitutes as insider trading. 

The celebrity was sentenced to five months in prison and two years of supervised release for conspiracy, obstruction of agency proceedings, and false statements to federal investigators. Additionally, she owed a $30,000 fine.

al capone

Al Capone 

This infamous Chicago Mob Boss underwent a three-year investigation of his finances and bookkeepers in the late 1920s. In 1931, he pleaded guilty to five counts of income tax evasion. In the court order, the judge sentenced him to pay over $200,000 plus interest in back taxes. In today’s dollars, that would equate to over $3 million in back taxes.

Part of his sentence included 11 years in prison, part of which was spent in Alcatraz.  

 

A Final Word

One thing we’ve noticed about all of our clients is that they hope the government won’t notice when they make (sizeable) errors on their tax returns.

Tax issues can be very serious, regardless of your business size. If your business owes back taxes, you cannot afford your current tax bill, or you are facing another legal tax matter, don’t risk a fate like these celebrities. 

Contact Milikowsky Tax Law for expert legal support. Our experienced team of tax attorneys will defend you in a battle against IRS and protect your assets during your most challenging tax law concerns.

For more information on tax law for small businesses owners, read our article here. 

here are the top celebrity tax cheats

Filed Under: Blog, COVID-19, News Tagged With: Audit, Business Owners, California Taxes, Corporate Tax Compliance, EDD, Filing taxes, International Law, International Tax, IRS, IRS Audit, Small business, Tax Attorney, Tax Preparation, Tax Season, taxes, unemployment

Archives

Search

Categories

Questions About
Tax Audit/Controversies?

A representative will be in contact within 1 business day
PRIVACY POLICY

Get Monthly Updates on Important Tax Law Matters



Milikowsky Tax Law is located at: 4250 Executive Square, Ste. 650, La Jolla, CA 92037
o. (858) 450-1040 | m. (858) 212-0542 |
Privacy Policy

DISCLAIMER:
The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.

Milikowsky Tax Law © All Rights Reserved. Clear1099.com | Cal1099.com | California1099.com © All Rights Reserved.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT