Celebrities, just like average taxpayers, can run into serious IRS problems. You have an edge over the high-profile celebrity tax cheats in that you can learn how to avoid IRS tax problems from the worst celebrity tax evasion cases.

Recently Access Hollywood compiled a list of celebrity tax cheaters who found themselves in deep IRS trouble with Uncle Sam. With thousands of fans and loyal followers, ending up on the California’s list of people who owed the most in back taxes does not sound very good for publicity.

The old trick of moving overseas no longer work for tax evasion as many foreign bank accounts are seriously contemplating not accepting American account holders (after the latest UBS ordeal). Some countries like the UK has set up special VIP celebrity tax evasion squads to come after those who are rich and famous with a dislike of paying taxes.

The list of celebrity tax cheaters is impressive: Leona Helmsley, Al Capone, Judy Garland, Annie Liebovitz, O.J. Simpson, Luciano Pavarotti, Martha Stewart, “Stone Cold” Steve Austin, David Brenner, Anna Kournikova, Lea Thompson, Method Man, Floyd Mayweather, Jim Thorpe, MC Hammer, Nicolas Cage, Stephen Baldwin, Toni Braxton, Robin Givens, Dionne Warwick, Sinbad, Buster Keaton and Willie Nelson.

Some of the most famous celebrities are on the California’s Top Delinquent Tax Bill List. Read more on my blog post about how celebrity tax evasion added to the $143 Million in California Back Taxes. Let these celebrity tax cheaters’ pains be your gain. Here are some important tax evasion lessons you can learn from these celebrity tax cheaters:

1. Marc Anthony’s celebrity tax evasion lesson: Trust, but verify. Celebrity tax cheater Anthony’s (singer, actor and J.Lo’s husband) tax evasion problems started with four years of unfiled tax returns. With the help some of the best tax attorneys money can buy, he convinced the IRS that he didn’t commit tax evasion because he trusted his financial team to file the returns for him. According to Anthony, he didn’t know he was a celebrity tax cheater and was surprised to discover his team had gotten him on the hook for tax evasion. Because he convinced the IRS he wasn’t complicit in the unfiled tax returns, Anthony escaped the celebrity tax cheater label (and more importantly tax evasion jail time), but still had to pay $2.5 million in back taxes. The tax evasion lesson here is to confirm that your taxes have been filed. If you suspect someone on your team is making you a tax cheater, or hasn’t been acting properly, contact a tax attorney immediately.

2. Sophia Loren’s celebrity tax cheating lesson: Even an innocent spouse can end up doing jail time. The tax evasion case against the Italian screen siren had more to do with her celebrity tax cheater husband Carlo Ponti’s unpaid taxes, but Loren ended up doing 17 days of a 30-day sentence in a Naples jail for tax evasion. If you file a joint return, your neck is on the tax evasion line for your tax cheater spouse’s taxes. Many couples appoint one partner to handle the finances. If you feel your tax cheater spouse hasn’t been faithful with their taxes, take your returns to a tax attorney or tax resolution specialist to see if you qualify for innocent spouse relief.

3. Abbott and Costello’s celebrity tax cheating lesson: Don’t let your nice guy image get in the way of avoiding a tax evasion problem. Although he played the fool in the movies, Lou Costello (the dumb one of the comedy duo) was the more astute businessman and Bud Abbott (the smart one) was constantly making bad business decisions. Sometimes our self or public image prevents us from being assertive with our business and financial advisers when it comes to the topic of tax evasion. This lack of follow-through cost the celebrity tax cheating comedy duo dearly. According to Wikipedia, in 1956, the Internal Revenue Service charged the celebrity tax cheaters with tax evasion, forcing them to sell their homes and most of their assets, including their lucrative film rights. In 1957 they formally dissolved their partnership. Don’t let a tax evasion problem destroy your partnerships, always asks tough tax evasion questions of your financial team. And contact a tax evasion attorney or certified tax resolution firm immediately if you need tax help with your IRS problems.

4. Wesley Snipes’s celebrity tax cheating lesson: Write your politics on your blog, not on your tax forms. According to his tax evasion trial coverage, one of the reasons celebrity tax cheater Wesley Snipes didn’t file his tax returns was due to bad tax evasion advice that was politically motivated. Although failure to file your taxes is a misdemeanor, celebrity tax cheater Snipes was sentenced to three years of jail time and millions in back taxes and tax evasion penalties. You may have heartfelt political or religious feelings about how your taxes are used, or even the validity of the U.S. Government to levy taxes, but put those tax evasion thoughts in your blog, not on your tax forms. Once you file (or don’t file) your taxes, it becomes tax evasion, which can send you to jail. If you’ve gotten on the tax cheating side of a political tax protest, contact a tax evasion attorney before the IRS or other G-men come knocking on your door.

5. Richard Hatch’s celebrity tax cheating lesson: Don’t “forget” to pay taxes on income (especially when 51 million people saw you get it). As the first winner on Survivor, celebrity tax cheater Richard Hatch argued that he wasn’t guilty of tax evasion because he believed that CBS had paid the taxes on his million-dollar win (despite clear language in his contract explaining that he was liable for paying all taxes). If you get advice that says you don’t have to pay taxes on income, get a second opinion. If you make serious bucks, have your financial team’s tax work audited by another firm. If you think you’ve been given bad tax evasion advice, run, do not walk, to your nearest tax attorney or tax resolution specialist.

6. Joe Francis’s celebrity tax evasion lesson: Just because you’re incorporated, doesn’t make everything you grope a “deduction”. The celebrity tax cheater producer of the Girls Gone Wild videos claimed more than $20 million in phony tax deductions. His tax cheating returns were more like Accountants Gone Wild. If you’ve got some filer’s remorse, and suspect that you might be guilty of tax evasion, you can always file an amended return, but consult with a tax evasion attorney first. You don’t want your amended return to be seen as an admission of guilt for more serious tax evasion charges.

7. Darryl Strawberry’s and Pete Rose’s celebrity tax evasion lesson: What part of INCOME taxes don’t you get? At one time, celebrity tax cheaters Darryl Strawberry and Pete Rose were baseball’s biggest stars, making their autographed memorabilia very valuable. While these celebrity tax cheaters could rattle off their statistics for every season, the one figure they forgot to include was the income from autograph and memorabilia shows. When they autographed their tax returns without that income, they became celebrity tax evaders. Celebrity tax cheater Strawberry was ordered to pay $450,000 in back taxes, while celebrity tax cheater Rose had to pay $366,000 and went to jail for five months for tax evasion. If you’ve “forgotten” some income (such as eBay profits), you’re a tax cheater. Consult a certified tax resolution specialist or tax attorney on how to amend your IRS return without getting hit with severe penalties for tax evasion.

It is true that even the beautiful and rich cannot escape Uncle Sam, but some people may not realize that the IRS doesn’t only go after the “Big Fish.” I recently blogged about how average Joes are just as likely to get into IRS trouble. You may envy the celebrities for their glam and fortune–but if you take these tax evasion lessons to heart, you will have something much more valuable than fame. You will have your financial and personal freedom.

For more information on achieving a tax resolution for your back taxes or IRS debt, visit www.taxresolution.com for a free tax relief consultation or call 866-IRS-PROBLEMS.

More Tax Help, IRS News and Tax Relief Tips:

1. Tax Resolution News: In 2010, IRS to Put Even More Heat on Tax Cheats
2. Release Your IRS Bank Levy: How a Tax Attorney or Certified Tax Resolution Specialist Can Give You an Advantage
3. Tax Resolution News: IRS Warns Against Frivolous Tax Arguments That Can Incur Severe Penalties
4. Tax Help: How to Resolve Your Back Taxes & Prevent Tax Problems If You’re Short on Cash This Season
5. Tax Help News: IRS Announces it Will Ease Rules on Tax Settlements, Offers in Compromise

Tags: Back Taxes, celebrity tax cheats, celebrity tax evasion, Innocent Spouse, IRS debt, Michael Rozbruch, tax attorney, tax expert, tax help, Tax Tips, unfiled taxes

This entry was posted on Thursday, October 22nd, 2009 at 8:51 am and is filed under Back Taxes, IRS Question Corner, Innocent Spouse, Seeking Professional Tax Help. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.