The Tax Miseducation of Lauryn Hill




Lauryn Hill has learned that being a rock star, although it exempts you from many of the burdens of life, does not exempt you from filing taxes. Just like famous actor (Wesley Snipes) and hotel heiress (Leona Helmsley), Lauryn Hill has felt the full wrath of the US Government by being thrown into jail for failing to file tax returns.

It seems, Miss Hill, through her bevy of tax and financial advisers, did not file tax returns for 2005, 2006 and 2007. Three years; that's the magic number for the IRS to have a presumption of "willful" failure to file. Even though she had big tax losses in 2008 and 2009, her late filing and late paying of tax means she is going to Federal Prison for 3 months.

Let's look at the facts:

Failure to File - 2005, 2006, 2007
LATE Payment - $1mil in taxes (note she actually paid the taxes, just late)
Tax Loss - 2008, 2009 when she lost popularity.

So let's see what really happened here. The US government probably spent about $1 million to prosecute a case that wasn't worth very much from a tax standpoint. On the other hand they got tens of millions of dollars, if not hundreds of millions of dollars, of free publicity to scare people into "voluntarily" complying with the US tax laws. So in reality this was a good investment for the government on the back of Ms. Hill.

The real lesson for most taxpayers is if the IRS contacts you, say nothing! Anything you say to the IRS, or a state taxing authority, can and will be used against you. You can end up with huge fines and penalties and possibly even jail time like Lauryn Hill and Wesley Snipes. When the government comes knocking at your door, immediately call your tax attorney!

Typically, criminal investigation agents of the IRS come in pairs for their own protection. So remember "if you see double you're in trouble."

Ron Cappuccio
www.TaxEsq.com

Popular posts from this blog

Trump's tax plan

115th Congress - Will we get Tax Reform and Simplification?

New Jersey Division of Taxation Closes Restaurant - leaving employees and customers stuck