Five Famous People Who Got Busted for Tax Evasion

Chances are, you’ve read the “Celebrities…They’re Just Like Us” section in a famous gossip magazine while waiting in line at the grocery store. While their idea of “Just Like Us” and reality are two separate matters, famous folk are just like us in that they can run afoul of the IRS. Read on to learn about five famous people who got busted for tax evasion.

Martha Stewart

Martha Stewart, with homemaking empire and endorsements¬† didn’t have to worry about living paycheck to paycheck like most people. Unfortunately, her sizable income and multiple real estate holdings left her in hot water with the IRS. Ms. Stewart was on the hook for $200,00 in back taxes to the State of New York. The reason? Her East Hampton estate. Her rationale was since she didn’t occupy it a good deal of the time, she was exempt from paying the property taxes.

Lesson: Always pay property taxes, even on investment properties.

Richard Hatch

As the winner of the first season of the “Survivor” franchise, Richard Hatch earned a cool million on national TV. He failed to report those earning, and the IRS tribe has spoken: he received a six-year sentence for evasion, but only served three years. As a condition of his release, he was supposed to amend his tax returns to reflect his million dollar winnings.

Instead, he neglected to follow through and earned another ticket to the slammer instead.

Lesson: Report all of your income from all sources. Hatch was a visible target because of his short-lived reality show fame, but the IRS has no problem going after average people for tax evasion.

Annie Lebovitz

This famous photographer’s work has appeared in Vanity Fair, Rolling Stone, The New Yorker and other national publications. It was her Rolling Stone photo of John Lennon and Yoko Ono in 1980 that brought her out of the shadows and into the forefront of modern photography. The income landslide that followed lead to poor spending habits and extravagant living.

In 2009, Lebovitz was over 2.1 million dollars in arrears for the 2004-2007 tax years. In order to secure a loan to pay off that monster debt, she has to pledge the copyright to all of her past, present and future work.

Al Capone

Even the true Original Gangster couldn’t outrun and outgun the IRS. While the federal government’s charges didn’t stick, the IRS caught up with him and he plead guilty to tax evasion in 1931.He served 7 years of his 11-year sentence. After his release, he was never able to fully reestablish himself in the world of crime.

Wesley Snipes

This popular action star failed to pay taxes from 1999-2004. Although he considered himself to be a resident alien due to his religious beliefs, he was in fact a legal citizen of the U.S. He was charged with tax evasion and ordered to serve a three-year prison sentence beginning in 2010. After losing his appeal, he served and was released in 2013.

His tax bill was over $10 million in taxes, penalties and interest.

Celebrities are “Just Like Us” only in the respect that they must pay taxes like the rest of us. Just like us, they will get charged with tax evasion if they don’t pay up.

Lesson learned: Whether your tax bill is big or small, the IRS wants it all.