Owed Back Taxes Contribute to Drake Bell’s Bankruptcy Filing

Tax law requires that individuals file a return for income earned annually, and if a person doesn’t complete this process, he or she will owe back taxes. The Internal Revenue Service is not an organization that people want to dodge, which former Nickelodeon Star Drake Bell recently found out the hard way.

Drake Bell 2007By jenniferh2525 (Drake Bell) [CC BY-SA 2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

Bell – who most recently participated in ABC’s diving competition “Splash” – reportedly filed for bankruptcy. It is said that he has debts that total $581,000, which includes back taxes. While the 26-year-old made $408,000 in 2012, that number dropped to just $14,099 in 2013. With expenses totaling $18,771, Bell found himself in financial trouble.

If you owe back taxes like bell, there are several options available:

  • Tax bill payments: According to the IRS, people who are unable to pay their full tax bill would be wise to secure a loan to pay in full rather than make installment payments. The IRS will charge late fees and penalties, which could be more expensive than the interest charged on a loan.
  • Ask for an extension: Depending on the circumstances, people can ask for additional time to pay their tax bill in full. This can be secured using the Online Payment Agreement application, which can be found at www.irs.gov. However, this option isn’t made available to everyone.
  • Installment agreement: People who are unable to pay in full, and don’t want to take out a loan, can request an installment agreement through the IRS. This means the person who owes back taxes will have to pay the amount due each month or face additional financial penalties.
Share on LinkedInShare on FacebookTweet about this on TwitterShare on Google+Share on TumblrPin on PinterestShare on RedditShare on StumbleUponEmail this to someone

Frank Brunetti has been practicing law for over thirty years in the areas of estate and wealth preservation, tax planning for business entities and complex tax matters. He is admitted to the New Jersey and New York Bars as well as the United States Tax Court. Mr. Brunetti provides representation in federal and state tax matters, IRS controversies, estate and business planning and guidance for the preparation of wills and trusts as well as the administration of estates. For more information, please visit Frank Brunetti's full biography at Scarinci Hollenbeck

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>