Tax evasion is an illegal act wherein an individual, organization or corporate entity intentionally avoids its obligation to pay taxes by illegal means. Simply by not filing or paying taxes that are due, or by using a method to reduce one’s taxes that is illegal, a person can be held criminally liable. Other examples include a failure to declare income or claiming deductions for expenses that do not exist. While every taxpayer has a right to mitigate or reduce the taxes they owe, they must do so by legal means.
Many celebrities have found themselves in trouble with the IRS. With their immense wealth and expenses, some have intentionally tried to hide assets and income, while others may have relied on faulty financial advice or on others to prepare their taxes for them.
Wesley Snipes
Wesley Snipes, according to a federal judge who sentenced the film star to three years in prison on three counts of willfully failing to file tax returns, exhibited “a pattern of contempt” in not even filing his tax returns over a 10-year period. He reportedly owed more than $5 million to the IRS.
Judy Garland
Judy Garland was one of the most popular singers and entertainers of her time. One of her best known films, A Star is Born, was a box office flop despite its critical acclaim, and Garland never received the profits she had expected. The film’s failure contributed to Ms. Garland’s financial woes. In 1962, she accepted an offer from CBS to star in the Judy Garland Show for $24 million. At the time, she owed the IRS hundreds of thousands of dollars for unpaid taxes from 1951 and 1952. The show was cancelled after only one season, and Ms. Garland’s home was repossessed by the IRS towards satisfying a tax debt of $4 million.
Pete Rose
Pete Rose, baseball’s all-time hit leader, served five months in jail for tax evasion in 1990 after admitting he underpaid his income taxes by $162,000 from 1984 to 1987. More than a decade later, he was hit with federal and state tax liens of over $150,000 for his 1997 and 1998 taxes. Rose is still attempting to get into baseball’s Hall of Fame despite his admitted gambling on baseball games while a manager of the Cincinnati Reds.
