Celebrity tax problems begin when they lack interest in their own assets and personal business affairs. Sadly, this lack of interest can expose them to dishonest business professionals becoming victims of financial misdoings and facing IRS tax issues brought on by these trusted advisors.
However, some celebrities see the light and fight back against suspected financial victimization. A New York Post article titled Rihanna reveals tax troubles in $uit vs. former accountants and Wall Street Journal article Rihanna Sues Former Accountants show the young performer suing her former accountants for mismanagement, blaming them for her current IRS issues.
Both articles report that Rihanna is currently undergoing a lengthy IRS audit over her 2008 through 2010 tax returns that could have her owing tens of millions of dollars to the IRS. The suit claims that her tax debt issues are a direct result of gross negligence by accounting firm Berdon LLP who provided Rihanna with accounting, business and financial management services for all aspects of her music career. (The accounting firm was fired by the singer in 2010.)
The singer’s suit against Berdon and two accountants claims that Rihanna and Tourihanna (the concert touring company) were defrauded out of millions of dollars in lost revenues and profits by engaging in the following practices:
- The two accountants were paid a commission based on the singer’s gross receipts, often 22% of the tour’s total revenues when the artist received just 6%. Apparently, this is not a standard practice in the industry.
- These same accountants allegedly concealed certain facts about Rihanna’s finances knowing that had she known about them, would not have terminated the firm.
- The firm failed to provide a proper budget for her Last Girl on Earth tour which resulted in Tourihanna losing millions of dollars.
- The accountants are also charged with poor record keeping that failed to account for the young singer’s revenue and expenses failing to maximize her “personal net worth and long-term wealth.”
Rihanna’s suit seeks unspecified damages from Berdon LLP’s accountants Michael Mitnick and former Berdon accountant, Peter Gounis. We’ll see if the singer’s legal team has success in proving a case against these advisors. Let’s hope when it comes to her IRS issues, she has hired superior tax representation that can help her negotiate a suitable IRS tax settlement for her unpaid taxes and reduce severe IRS penalties she may have incurred.
More Tax Help, IRS News and Tax Relief Tips:
- Tax Expert Gives Tax Filing Info on Fox News
- Tax Relief Weekly News Round-Up
- Tax Expert-Hiring a Tax Professional on Fox News
- Tax Resolution Services Offers Returning Veterans Free Tax Advice
- IRS Offers Tax Help Tips-Worker Classification