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Famous Celebrity Tax Frauds In History

Published Sun May 19 2019 By Chandra Rana Magar
Famous Celebrity Tax Frauds In History

All stand equal in the eyes of law’, either they are a celebrity or an ordinary citizen of a country. In this evolving era, tax payment has been a major concern and a root for the development of a nation. So, those evading taxes are claimed guilty and are punishable according to law.          

Each and every citizen has to pay taxes, and obviously, celebrities are not an exception. But here, we are talking about some famous celebrities who got into the legal troubles for evading taxes.

Before getting into the main core of our topic, let us share some information on the levitation of taxes.

Why & How Is Tax Policy Applied?

Well, taxes aim to raise fund for the government to implement on the development projects and ultimately, benefitting the citizens. Taxes are mainly categorized as Property Tax, Income Tax and Goods and services tax. Besides this, the commonly levied taxes are capital gains, VAT and sales tax.

Depending upon a state, region or country, the policy of tax varies in accordance with the value of the amount to-be-taxed. More the revenue and value of the property more turns to be the liability to be paid.

Brief Info On Tax Levied In the United States

Well, in the United States, generally the residents do have to encounter property and income tax, usually levied by local government, at the municipal or county level.

The property tax rate across the United States ranges from 0-4%, with New Jersey having the highest-average state property tax rate of 2.293%. On the other hand, California applies the lowest tax rate for properties, i.e. 0.813% but has the second-most expensive homes of all the states.

As per Forbes, the 2019 Federal income tax brackets is:

Range of IncomeEffective Tax Rate
SingleMarried (filed jointly) or Qualifying WidowHead of Household
$0 to $9,700$0 to $19,400$0 to $13,85010%
$9,701 to $39,475$9,701 to $39,475$13,851 to $52,85012%
$39,476 to $84,200$78,951 to $168,400$52,851 to $84,20022%
$84,201 to $160,725$168,401 to $321,450$84,201 to $160,70024%
$160,726 to $204,100$321,451 to $408,200$160,701 to $204,10032%
$204,101 to $510,300$408,201 to $612,350$204,101 to $510,30035%
Above $510,301$612,351 or more$510,301 or more37%

Okay now, it’s time to know about the most-talked and expensive tax invasion in history.

Famous Celebrities Tax Invasion

It’s true that tax invasion is considered as a huge crime, and even more, it’s a delicate issue when the tax invader’s list consists of celebrities.

Surely, as an idol and massive earners, the famous personality does have a responsibility and is taken a role model for any work, while the wrongful deeds from them may influence anyone to an unlawful act.

Check out the list of some celebrities who made highlights for evading taxes:

1. Ty Warner; CEO, Sole Owner And Founder Of Ty Inc.

The American billionaire businessman and former actor, Ty Warner pleaded guilty in 2013, citing the invasion of multi-million dollars income. Well, he had made a deposit of $80 million at UBS AG in Zurich in 1996 but never disclosed any substantial proof of his income.

Furthermore, prosecutors stated that he had dodged around $5.6 million on tax payment, from $25 million revenue of his secret Swiss stash.

Beanie Babies founder Ty Warner
Beanie Babies founder Ty Warner

Well, he was fined $53.5 million and an additional $16 million in back taxes and interest, followed by the 46 to 57 months in prison. However, the Chicago court granted him the provision for community service.

Meanwhile, as of May 2019, Ty Warner owns the fortune of $2.7 billion.

2. Wesley Snipes; American Actor, Director & Film Producer

Famous for his work in Demolition Man (1993), and the Blade film trilogy, Wesley Snipes was convicted of tax payment failure from 1999 to 2004. Despite earning $38 million, Sniped failed to pay taxes and also had filed for $12 million in bogus refunds.

American actor and film maker Wesley Snipes
American actor and film producer Wesley Snipes

For his conviction, Wesley was fined $17 million to pay up for taxes and penalties, moreover, was sentenced to 3 years.

3. Shakira; Columbian Singer

Back in 2018, Spanish prosecutors charged the ‘Waka Waka’ singer Shakira for the tax evasion through 2012-2014. As reported, she had an unpaid tax amount of €14.5 million ($16.5 million).

Even if Shakira stated that she lived in the Bahamas, sources cite that she was living actually in Spain.

Colombian singer Shakira is charged with tax invasion
Colombian singer Shakira is charged with tax invasion

Later, Spain ended up making her pay €19.4 million for tax and interest.  

4. Mike Sorrentino aka The Situation; Reality Show Star

Famous for playing in the MTV reality show Jersey Shore, Mike Sorrentino pleaded guilty of evading taxes in January 2018. As per TMZ, the reality star had an unpaid tax from the $9 million earnings from 2010 to 2012.

Mike Sorrentino famed as The Situation
Mike Sorrentino famed as The Situation

So, later in October 2018, the court sentenced him 8 months to prison, effective from January 2019.

5. Rashia Wilson Aka Queen of Tax Fraud

Well, many of us have fantasies to do something we have never did before, the case falls same for Rashia Wilson whose fantasy challenged the law.

Famous for her fraud tax returns files, Rashia Wilson reportedly had created a Facebook page where she claimed about her crimes and challenged law enforcement to find her. It gained her the name of Queen of Tax Fraud.

Queen of Tax Frauds, Rashia Wilson
Queen of Tax Frauds, Rashia Wilson

Later in July 2013, Wilson got sentenced 21 years to prison and a $3 million payment for restitution. Before her tax charges, she already had been arrested 40 times. 

Forbes report that from her revenue with fraud refund claims, she spent $30,000 on her 1-year child’s birthday while a whopping $90,000 for an Audi in 2013.

6. Ja Rule; Rapper As Well As Actor

Jeffrey Bruce Atkins, famed for the stage name Ja Rule, indeed is one of the million dollars earning rappers of America. Professional since 1993, the rapper owns the net worth of $8 million alongside massive fame.

However, he is not free from legal troubles. As per The Washington Post, Ja Rule failed to pay taxes on the income of over $3 million in March 2011.

Rapper Ja Rule was fined million dollars for back tax payments
Rapper Ja Rule was fined million dollars for back tax payments

Thereafter, the rapper was fined $1.1 million for back taxes and 28 months in prison but made an early release by May 2013.

7. Leona Helmsley; American Businesswoman (Died in 2007)

The late American businesswoman, Leona Helmsley, known as Queen of Mean made up billion dollars from her business venture. While she died in 2007 at the age of 87, her empire was estimated to be worth $8 billion.

However, a conviction of tax invasion became a spot on her million dollars earnings. As per the Los Angeles Times, the hotel magnate had evaded $1.2 million in taxes in 1989.

Late American businesswoman Leona Helmsley
Late American businesswoman Leona Helmsley

Pleaded guilty for tax fraudulent, Helmsley was sentenced 4 years in prison, adding up the 750 hours of community service. However, after the court found out that Leona employed employees for her community work, she gained another 150 hours for community work.

As per Forbes, at the time of her death, Leona Helmsley left billions to charity, $12 million for her dog’s care to the trust while grandsons received $5 million each.

8. Fat Joe; American Rapper

The Make It Rain, singer Fat Joe surely lives a lavish lifestyle owning the net worth of $5 million. Despite the luxury, the American rapper did experience the prison surrounding as well.

He pleaded guilty on the failure of tax file in 2012 for his earning that ranged above $3 million.

American rapper Fat Joe got in the tax payment issues
American rapper Fat Joe

As a punishment, Joe paid $718,000 in back taxes and a fine of $15,000, before he was sentenced to 4 months in prison.   

9. Teresa And Joe Giudice, Reality Show Star

Famous for appearing in The Real Housewives of New Jersey, Teresa Giudice and her husband Joe Giudice was convicted of 41 counts in April 2014, regarding fraud and tax charges.

The duo filed a false Chapter 7 bankruptcy in 2009, hiding about their income and assets. Moreover, Joe who was earning $1 million from his construction company failed to pay taxes from 2004 to 2008.

Teresa and her husband Joe Giudice convicted of tax fraudulent
Teresa and her husband Joe Giudice convicted of tax fraudulent

Later in October 2014, the couple was ordered $414,588 for restitution and sentenced to prison. While Teresa was sentenced to 15 months, Joe received 41 months imprisonment.

10. Stephen Baldwin; Actor & Producer

The 53-year-old American personality, Stephen Baldwin was charged with unpaid income tax in March 2013. Well, as reported, the New York court totaled $400,000 in to-be-paid taxes through 2008, 2009 and 2010.

American actor Stephen Baldwin
American actor Stephen Baldwin

As per CBS News, Baldwin stated that it was unintentional and paid off the debt in a year, dodging the time in prison. Moreover, he pointed out fingers on the bad advice from lawyers and accountants for the trouble.

11. Iggy Azalea; Australian Rapper And Singer  

In 2016, the government of USA convicted American singer Iggy Azalea of irresponsible taxpaying duties and with $391,000 tax lien.

Australian-American singer Iggy Azalea
Australian-American singer Iggy Azalea

Azalea rose to the height of her career after releasing her album The New Classic (2014), it was certified platinum by RIAA after making the sales of 500,000 copies.

12. Nicolas Cage; American Actor & Film Maker

The Ghost Rider star Nicolas Cage, in 2009, was convicted for the tax payment failure of 2007 which was over $6.2 million.

Nicolas Cage blamed lawyers and finanacial manager for tax payment failure
Nicolas Cage blamed lawyers and finanacial manager for tax payment failure

As reported, the IRS filed a lien of more than $350,000 for unpaid taxes from 2002 to 2004. As for a surprise, Cage blamed his financial manager and the lack of the suggestions for his lawsuit that include expense on a private island and 2 albino king cobras.

Meanwhile, the American actor owns the net worth of $25 million.

Well, regarding tax payments for celebrity, it can be a challenge to file it correctly and on time due to the massive flow of money. But isn’t it worth to extend the time for correct tax calculation rather than to spend time in prison?

Dishonorable mention: President Donald Trump

Yes, the president of the United states of America, Mr. Trump is also not a new name to the tax frauds' list. He owns millions of dollars to the government and is accused of many tax frauds including Gift Tax Fraud, Security Tax Fraud & Loan Fraud, and Estate Tax Fraud. Full details here.