The Internal Revenue Service (IRS) and local state taxing authorities can claim many high-profile cases. These federal and state agencies will go after taxpayers who have not met their obligations, ranging from the regular guy next door to mega-stars. These cases underscore that tax enforcement applies equally, regardless of wealth or public profile.
Tax crime prosecutions of Hollywood’s elite include:
- Nicholas Cage. In 2014, the IRS accused Cage, one of the highest-paid actors at the time, of owing more than $6 million in property taxes.
- Wesley Snipes. The IRS built a successful case against this action star for failure to file his taxes. The court sentenced him to prison time and imposed financial penalties exceeding $5 million.
- Martha Stewart. Known as the queen of home décor, party planning, and DIY projects, Ms. Stewart has had more than one brush with the law. While most widely known for her insider trading conviction, New York state taxing authorities also pursued her for failure to pay taxes on property in East Hampton.
- Shakira. Music sensation Shakira is one of the most recent examples. The Spanish government claims she failed to pay income taxes from 2012 through 2014 and could face nearly a decade of imprisonment if convicted.
As these examples show, taxpayers can face everything from hefty financial penalties to time in prison. Similar consequences have been imposed in other major enforcement actions, including some of the largest tax evasion cases ever pursued, where concealment and failure to report income significantly worsened outcomes.
The same rules apply to those who do not fly quite as high on the popularity radar. Whether wealthy and maintaining a lower profile or an everyday taxpayer, a notification from the IRS or state taxing authority can quickly escalate from a civil audit into a criminal investigation. Understanding where the line is drawn between tax planning and criminal conduct is critical.
Many tax evasion cases also involve third-party disclosures or tips, making detection more likely than ever. Increased reliance on informants has played a role in recent prosecutions, as discussed in how whistleblowers can trigger tax investigations.
You do not have to go through this process alone. The law provides the right to legal representation. The attorneys at Goldburd McCone have experience handling criminal tax matters and can help guide you through audits, investigations, and enforcement actions toward the most favorable resolution possible.