Some Celebrities Continue to Shirk Tax Obligations

Celebrities typically rake in millions of dollars in movie proceeds and record deals, and many Americans are surprised when a handful of these individuals fail to pay their taxes. From Willie Nelson and Wesley Snipes to Martha Stewart - prior to being convicted of insider trading - there are several notable celebrities as of late who have violated federal or state tax law and faced heavy penalties and fines.

Most recently, the California Franchise Tax Board released the names of new celebrities who are facing charges for ignoring their state tax burdens. For example, singer Dionne Warwick, who currently resides in New Jersey, has been delinquent on a $2.6 million tax bill to California since 2003, the Huffington Post reports. Although no details were released, Warwick's publicist notes that the singer has worked out a repayment plan with the state.

Steven Seagal, best known for his action-packed films, is also currently delinquent on a $350,000 tax bill to the state.

As many states - especially California - suffer revenue shortfalls from falling property tax revenues, budget restraints, rising medical and pension costs and municipal debt, it is likely that the state will seek out and penalize individuals and businesses that fail to pay taxes. States may begin adopting new Internal Revenue Service strategies for tax collection, which have become more aggressive as the federal agency attempts to close the national tax gap.

As state and federal agencies find new strategies to increase their collection attempts, businesses and high net-worth individuals are encouraged to educate themselves on their obligations under tax law, as well as their repayment options. State and federal agencies are legally authorized to impose heavy penalties and interest rates on those entities and individuals who shirk their responsibilities.

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James F. McDonough, Jr. concentrates on wealth preservation and estate planning for high net worth individuals, closely held business matters and ownership succession, estate administration and income tax planning. He worked for three years for the public accounting firm, then known as Touche Ross, where he obtained his license as a Certified Public Accountant in 1983. In 1984, he was employed as a tax attorney by Union Camp Corporation where he engaged in planning for corporate income deferred compensation, qualified plan and tax-free exchanges. In 1986, Mr. McDonough was employed as Tax Manager for Monroe Systems For Business, Inc. Thereafter, he was employed as a tax attorney for five years where he engaged in corporate and estate tax planning and estate administration and litigation. For more information, please visit James McDonough's full biography at Scarinci Hollenbeck

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