TAX MASTERS NO HELP FOR TAX PROBLEMS – ABC NEWS
Sharon & Ozzy Osbourne Owe Back Taxes
By Josh Board • Mon, Apr 11th, 2011
Sandiego.com
With tax day around the corner, no better time then now to have a story about the latest singer to run into tax problems. Ozzy and Sharon Osbourne could lose their US home if they don’t pay the $2 million tax debt on it. 
They’re one of the wealthiest couples in the UK, and aside from Ozzy’s music career, Sharon has had success with the Osbourne’s reality show, being a judge on the X Factor and America’s Got Talent, and now a panelist on The Talk. Sharon was also the first of the Osbourne clan to run into tax problems, when in 2009 she was slapped with a $23,000 tax bill to the State of California for payments going back to 2007.
TMZ has reported that daughter Kelly was hit with a tax lien of $34,000 last month.
Over the last few years, Ozzy and Sharon have accumulated a bit of debt. Documents filed by tax authorities state that “John” and Sharon Osbourne, ‘self-employed’, owe $718,948 in tax from 2008, and $1,024,175 from 2009.
Sharon did what most celebrities would do in this situation. She fired off a message on Twitter last Saturday. It said: You can’t rely on anyone but yourself. You have to be on top of your own business affairs. My fault. Lesson learned.
The most famous tax problem celebrity is Willie Nelson, who was hit with a $16.7 million tax bill in 1990. That stemmed from him not paying taxes between ’78 and ’82, and owing $6.5 mil. An additional $10.2 million was tacked on in penalties and interest. The IRS froze his accounts and auctioned off items in his personal position. Many of his fans bought those items, only to return them back to Nelson. Eventually, the IRS claimed Nelson owed $30 million, but that they’d settle for $17 million. This got Nelson poking fun of that in various commercials, and even releasing the album IRS Tapes: Who’ll Buy My Memories?
Releasing a record like that was nothing new. Marvin Gaye released an album called Here, My Dear, when he owed money on alimony payments.
When John Cleese played Spreckels Theatre here in 2009, he was calling it The Alimony Tour. His third wife got a $13 million divorce settlement, and he had to pay her a million a year in alimony. Perhaps he should’ve known better before marrying wife #3, but the comedic actor and Monty Python member does have a law degree – and is smart enough never to have run afoul of the IRS.
The Isley Brothers lead singer Ronald declared bankruptcy in 1997 after the IRS seized his property, including a yacht. He’s currently serving a 37-month sentence for tax evasion and failing to file a tax return.
Mr. Vegas, Wayne Newton, filed for bankruptcy in the early ‘90s with $20 million of debt. He got back into financial trouble in 2005, when the IRS claimed he owed them almost $2 million in back taxes.
Another singer that had a big Vegas show – Toni Braxton – filed for Chapter 7 a second time, late last year. She had well over $10 million in unpaid debts to numerous creditors, one of which was the IRS.
Wesley Snipes was recently given a sentence for years of failure to pay taxes. What a lot of people don’t realize is, the IRS is really good about working on payment plans with people, and the interest isn’t outrageous. Snipes was given jail time for continuing to run afoul of the tax laws. He made $40 million since 1999 (thanks mostly to the Blade films) and between 1999 and 2004, he never filed taxes. In 2006, he even tried to get a $7 million refund.
What a lot of people don’t realize is, if you don’t file, the IRS does a Substitute ForReturn for you. This doesn’t work so well for the rich and famous, as the IRS isn’t writing off all the things those folks probably would for deductions.
These days the IRS has more sophisticated resources and incentives (hundreds of billions owed to the federal government) for tracking down non-filers.
I’m guessing the Osbourne’s are in no real danger of losing anything they own. The IRS would have no problem believing they could pay back anything they owe from future earnings, and wouldn’t make them sell houses or personal items, the way David Crosby had to sell a yacht for a million bucks when he ran into financial problems.
Ozzy’s son Jack Osbourne has a production company (Jacko Productions) that has a documentary on Ozzy that is supposed to hit the theatres later this year. One of the things covered is all the craziness his dad was involved in over the years. We assume Jack has learned from the things that almost killed his father, and made him the punchline to many jokes.
Let’s hope Jack doesn’t also follow in the family footsteps and run into problems with the IRS in the future. Let’s also hope Ozzy doesn’t bite the head off an IRS agent.
Webster, Mass., man charged with killing wife shortly after IRS agents seized car for taxes
THE ASSOCIATED PRESS
March 23, 2011
DUDLEY, Mass. — A Webster man charged with killing his wife about an hour after two IRS agents seized their car for nonpayment of taxes has been ordered held without bail.
William Freudenthal (FROY’-den-thal) pleaded not guilty to second-degree murder Wednesday in Dudley District Court.
Worcester District Attorney Joseph Early Jr. says police responded to the 50-year-old Freudenthal’s home Tuesday when he became angry at the IRS agents.
Police returned less than an hour later after getting two 911 hang-up calls from the home. Officers found Jennifer Freudenthal on the bathroom floor with head and neck injuries. She was pronounced dead at a hospital.
William Freudenthal’s lawyer called the death an accident.
Police say they have gone to the home several times for alleged domestic violence incidents.
Lots of Big Stars Are in Big Trouble With the Tax Man
By Lindsay Carlton
Published March 21, 2011|FoxNews.com
March 26, 2010: 
Al Pacino poses for a portrait in Beverly Hills, Calif.
Despite their high-priced tax attorneys and mega-millions, big stars can find themselves in big trouble come tax time.
Take Hollywood director Martin Scorsese. He was recently nailed with a $2.85 million bill for unpaid taxes. Scorsese was charged for past-due tax and related interest penalties. Although Scorsese’s spokeswoman Leslee Dart says the entire amount is now paid in full and that he has no current IRS debts, sources say the Oscar-winning director’s tax woes are due to his dealings with celebrity accountant Kenneth Starr. Starr was jailed for seven and a half years for a $33 million ponzi scheme, and has duped other superstars in his corrupt plots. He scammed Hollywood heavyweights such as Uma Thurman, Lauren Bacall and Al Pacino, to name a few.
Pacino allegedly failed to pay taxes for two years, a bill for $169,143 in 2008 and $19,140 in 2009, totaling $188,283. Anyone who would stiff this “Godfather” star out of $200,000 might be sleeping with the fishes too, but luckily for Al Pacino, the IRS doesn’t handle their business the same way the mob does. Pacino poured the blame on Starr, his business manager and close friend for years. The money hungry financier apparently used a lot of his fraudulent earnings to play sugar-daddy to his younger wife, ex-pole dancer Diane Passage, who enjoyed a lavish lifestyle. “Managers can be very helpful, but many are not skilled in the area of tax planning and some are outright greedy when given control of celebrities finance,” said Ray Lucia, a certified financial planner.
A spokesperson for Pacino said the “Scarface” actor is working to resolve the situation as soon as possible with a new financial manager.
Another Hollywood cash cow who skipped his IRS bill is Jennifer Lopez’s husband, Marc Anthony. The Latin crooner owes $3.4 million for unpaid taxes on his Long Island mansion. Anthony has a history of running from the tax man. In 2007 he failed to pay taxes on his $15 million income over a five-year-period and ended up paying $2.5 million in back taxes. One might assume that such a power couple would have a better handle on their finances, but some tax attorneys aren’t surprised. “They live in a world where everyone gives them more and more leeway and slack — and they slowly develop an attitude of being above it all,” said Doug Burns, a federal prosecutor who has prosecuted dozens of tax fraud cases.
One pop star even sang a song about paying bills, the aptly titled “Bills Bills Bills,” but then forgot to fork up the cash herself. Former Destiny’s Child singer Kelly Rowland owes $98,634 in back taxes. The government filed a lien against her on Nov. 8, according to the Detroit News. The songstress hasn’t had much success since splitting from the Beyonce Knowles-led girl group. She also recently parted ways with her long-time manager and Beyonce’s father, Matthew Knowles. “Celebs who are attending to other details in their lives may brush taxes aside for later, but by then it’s too late,” said CelebTV.com host Kelli Zink.
“Survivor” winner Richard Hatch has had his fair share of tax trouble. The reality star spent three years in jail for failing to pay taxes on the $1 million prize money he won on the hit show. Hatch is heading back to the slammer for not settling a tax bill that is now reportedly up to $2 million. Hatch is currently starring in Donald Trump’s “Celebrity Apprentice” show. Although the episodes of the series have already been filmed, he will miss the live finale in May while he finishes his sentence behind bars. Along with his prison term, Hatch will remain under supervision for 26 months, and 25 percent of his wages will be garnished to pay back the IRS.
Joe Francis, founder of “Girls Gone Wild,” also spent some time behind bars for his tax tribulations and says the IRS targets celebrities every year around tax day. To avoid glitches in your taxes, Francis recommends Hollywood newcomers hire reputable business managers and get references from their other clients. “Good financial managers are helpful, ones like Bernie Madoff are awful. I was young, I was making a lot of money,” Francis said. “You trust people like lawyers and accountants. I didn’t even sign my own tax return. I didn’t even question it.”
Lil Jon Faces Tax Trouble
Several ”Celebrity Apprentice” Stars Owe Feds Money
6:00AM ET January 19th, 2011
Contributor : Hip Hop Blog Staff
There appears to be a legitimate reason for so many past-their-prime celebrities appearing on reality TV–and it’s not just to raise their profile or to gain a little publicity. Several celebs clamor to reality shows for one simple reason: money. Several of the contestants on this season’s “Celebrity Apprentice,” for example, have serious tax issues with the federal and/or state government.
The Detroit News compiled a list of “Celebrity Apprentice” cast members who owe Uncle Sam, and Star Jones ($356,991), LaToya Jackson ($28,252 in Nevada), Gary Busey ($645,382 in California), Dionne Warwick ($2.2 mil in California) and Jose Canseco ($320,000 in California) are all mentioned for owing back taxes.
Rapper Lil Jon faces a $638,937 lien the IRS filed against him in South Carolina back in 2008.
Oprah Hates Writing Checks to the IRS
Chicago (January 21, 2011)
By Michael Cohn
accountingtoday.com
Oprah Winfrey told Piers Morgan that the most difficult check she has to write each year is for the Internal Revenue Service, and she usually needs some tequila from her accountants when she signs it.
Winfrey admitted to Morgan during the debut episode Monday evening of the CNN talk show he is taking over from Larry King that she only signs checks for amounts over $100,000 nowadays. Winfrey launched her new cable TV network, the Oprah Winfrey Network, or OWN, earlier this month. But she still has “several hundred” checks to sign for over $100,000.
“It would knock your socks off,” she told Morgan. “Millions are going out.”
Morgan asked if that was painful. “The most pain I feel — and my accountants will tell you this — is every time I write a check to the IRS, it’s a ceremony. For years they came in with wine. Now they come in with tequila. It’s a tequila-signing ceremony.”
Morgan asked her what was the most painful check she ever had to write to the IRS, but Winfrey cannily ducked the question, teasing Morgan, “You’re good. You think I’m going to give you the number. No, no, no, no, no.”
Morgan noted that Forbes magazine estimates that Winfrey is worth $2.7 billion, and asked if the figure was accurate. She responded, “I knew you were going to go there sooner or later. I’m not sitting around counting it.” However, she added that she knows how much she’s worth “because I already had counted it.”
Morgan followed up by asking Winfrey about her philanthropic endeavors, which include the Oprah Winfrey Leadership Academy for Girls, a school she runs in South Africa for economically disadvantaged young women. Morgan noted that Winfrey reportedly has given away over $300 million to various charities, and Winfrey corrected him, saying she knew it was more than that amount.
He asked if she knew how much she has given away, and she replied, “No, I really don’t, but I know it’s more than $300 million. I have this school and it’s ongoing and I’m responsible for all of these girls and them getting an education, and I pay for every single thing and I think that the charitable work that you do — and when I’m gone everything that I have is going to go to charity because I don’t have children and I believe that that’s what you should do, that that’s how you should live your life. To whom much is given, much should be given back. To me, the money, it’s certainly a wonderful thing, but it is in direct proportion to how you’re able to bless yourself and how you bless others with it.”
Asked whether money can buy happiness, Winfrey responded, “It can certainly pave the way for it.”
Are Tax Troubles Ruining Your Marriage?
Supermodel and host of the reality television hit Project Runway, Heidi Klum is going into the advice business. Klum plans on sharing her insights on fashion, beauty, parenting and relationships with her fans.
Klum is married to pop singer Seal, and from all reports, the two have a strong and loving relationship. It’ll be interesting to see how the couple’s considerable financial wealth impacts her relationship advice – after all, financial issues are the leading cause of marital strife. MSN money recently detailed half a dozen ways that money can wreck a marriage.
Not on the list but definitely a big problem for many couples: tax problems. Unresolved tax issues can ruin your relationship. Here’s why:
Stress and Tension
The IRS uses aggressive and persistent collection techniques. The phone calls, intimidating notices, and threats of liens, levies on your wages and bank accounts, and seizure of your car or house can create an atmosphere of fear and anxiety that takes a toll on even the strongest marriages.
Financial Impact of IRS Actions
Tax liens can prevent a couple from borrowing money. This can make it difficult to buy a home, a car, or fund a child’s education. Not being able to realize long-cherished dreams such as these can create resentment and even hatred within a relationship. Additionally, many employers review a prospective employee’s credit report for IRS liens and often reject taking on a prospective employee who’s had trouble with the IRS. In today’s competitive job market, that can make finding and keeping a job even tougher.
What Can Be Done About IRS Tax Trouble?
Tax trouble doesn’t have to wreck your marriage. There are solutions to your outstanding tax issues. Often, simply beginning the process of dealing with unpaid taxes, unfiled tax returns, or other tax issues, eliminates a lot of stress and tension from the marriage. Knowing that the tax problem is getting fixed can put a couple back on the path to building a strong, happy life together – and that’s what a relationship is supposed to be about!
Federal Tax Liens: What You Need To Know
Nothing in this world is certain but death and taxes – and nothing can strike fear into the average person’s heart like a federal tax lien notice! A federal tax lien is a tool the IRS uses to collect outstanding tax debt. A federal tax lien gives the IRS claim to your property; after some legal proceedings, they can seize and sell your land, vehicles, and other valuables to settle your tax debt.
If you’ve received a notice from the IRS telling you that you are or soon will be subject to a federal tax lien, you may be experiencing feelings of fear and anxiety. Those feelings are natural – but don’t let them stop you from dealing with the situation. Tax problems do not resolve themselves on their own. If you’re receiving federal tax lien notices from the IRS, the time to act is now:
Preparing for Tax Season 2011: What To Do If You Have Outstanding Tax Problems
It’s that time of year again, when newspapers and websites are full of information about what you need to do to get ready for the upcoming tax season. There’s lots of websites that offer free tax preparation, agencies that coordinate volunteer tax preparers and do-it-yourself guides that promise to reduce even the most complex return into a quick and easy refund check.
It sounds like good advice – but is it good for you?
The answer is a qualified “It depends!” Many of the resources you’ll find listed in articles like these are great for taxpayers who have simple returns and are current with their tax obligations. However, if you’re currently embroiled in negotiations with the IRS or have tax issues that you haven’t addressed, you need professional assistance.
Finding Help For Your Tax Problems
The best way to help yourself resolve your tax problems is to work with a qualified tax professional. You have to be honest with these people and let them know the full magnitude of what they’re dealing with. Don’t withhold information for fear that the tax professional might ‘judge you’ – there’s nothing that they haven’t heard before!
Often times, people think that their tax problem is so unique and one of a kind that nothing could be done to resolve it. Nothing can be further from the truth! Every tax problem has a solution. You just need to work with someone who knows how to find it!
This year, the deadline for filing your 2010 federal tax return is April 18th. That means you have just over one hundred days to get ready to send your return and any payment due to the IRS. You also have one hundred days to start addressing your outstanding tax issues. Don’t wait until the last minute — there’s nothing harder to find than a tax expert with a free moment on April 15th! You deserve expert assistance with your tax problems.
IRS Has Problems Identifying Prisoner Tax Fraud
Washington, D.C. (January 3, 2011)
By Michael Cohn from accountingtoday.com
“More than two years ago, Congress gave the IRS the authority to share tax information with the Federal Bureau of Prisons,” said Senate Finance Committee ranking member Chuck Grassley, R-Iowa, in a statement. “The IRS and the Federal Bureau of Prisons still don’t have an agreement in place to share information. Meanwhile, the number of inmates’ false returns and refunds continues to rise. This signals that prisoner tax fraud is a low priority for the federal government. The agencies need to take action and correct that impression. While they wait, taxpayers are picking up a growing tab for prisoner tax fraud.”
TIGTA found that, as of October 2010, the IRS had not completed the required agreements to allow the IRS to disclose prisoner tax return information to prison officials. As a result, no information has been disclosed to either the Federal Bureau of Prisons or State Departments of Corrections.
In addition, the Calendar Year 2009 Report to Congress on prisoner fraud is incomplete. The report stated the IRS identified 44,944 false or fraudulent prisoner tax returns during calendar year 2009. However, the processes the IRS uses to identify prisoner tax returns may result in the IRS understating the amount of prisoner fraud. Finally, TIGTA’s review of the process used by the IRS’s Criminal Investigation Division to compile the 2009 prisoner data file identified a lack of managerial oversight to ensure the accuracy and reliability of this file.
TIGTA recommended that the IRS work with the Treasury Department to seek legislation to extend the period of time the IRS has to disclose prisoner tax return data to the Federal Bureau of Prisons and state prison officials. TIGTA also recommended that the commissioner of the IRS’s Wage and Investment Division revise the annual report to provide Congress with a complete assessment of potential prisoner fraud. TIGTA said the IRS should ensure that all tax returns filed by prisoners are processed through the Electronic Fraud Detection System and receive a prisoner indicator. The report also recommended that the IRS revise prisoner filters to validate the wages and withholding associated with prisoners incarcerated for a year who filed tax returns claiming a refund. The IRS should also develop a process to assess the reliability (accuracy and completeness) of data received from federal and state prisons, TIGTA suggested.
The IRS agreed with two of TIGTA’s five recommendations and partially agreed with two recommendations. The IRS did not indicate its agreement or disagreement with one of the recommendations, on providing Congress with a complete assessment of potential prisoner fraud by revising the annual report to include the total number of tax returns filed by prisoners, number selected for fraud screening, and the number verified as false or fraudulent.
However, the IRS noted hat it would continue to report to Congress all of the prisoner information that is required to be reported by the Inmate Tax Fraud Prevention Act of 2008, such as the number of false and fraudulent returns associated with prisoner filings. In addition, the IRS said it would respond to future Congressional requests pertaining to prisoner- related fraud.
The new report is available here.
TIGTA issued a report last September saying the IRS needs to subject tax returns filed by prisoners to greater scrutiny for fraud. The report was largely about how expanded access to wage and withholding information could improve the identification of fraudulent tax returns, but it noted that the majority of tax returns the IRS identifies as being filed by prisoners are not being sent to screening to assess fraud potential.
TIGTA’s review identified 253,929 (88 percent) of the 287,918 tax returns filed by a prisoner as of March 24, 2010, were not selected for screening. Of those tax returns not screened, 48,887 individuals had no wage information reported to the IRS by employers.
These 48,887 prisoners claimed refunds totaling more than $130 million including Earned Income
Tax Credit claims of $78.5 million. Some of these refunds may have been stopped by other compliance activities. For example, TIGTA determined that the IRS prevented the issuance of nearly $18.1 million in EITC claims for 4,532 of the 48,887 prisoner tax returns.
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