March 31st, 2010
As soon as you receive your first real paycheck, you experience the bittersweet moment when you understand income tax withdrawals. The more you make, the more the government takes out in taxes, but there’s nothing you can do about it, at least not legally. If you’re ever tempted to stiff the government on taxes, though, check out the stories of these 10 famous tax evaders. Let’s hope they convince you to keep it legal.
- Judy Garland: Movie star Judy Garland played dreamy, optimistic characters in some of her best films, but she famously struggled with drugs, self image problems and depression. She was divorced four times, and after a failed suicide attempt, died of a drug overdose when she was only 47 years old. In addition to her prescription drug problem, the Wizard of Oz star and Golden Globe, Grammy and Special Tony Award-winning actress did not pay taxes between 1951 and 1952. She was audited by the IRS and had to pay hundreds of thousands of dollars in back taxes, during a time in which she was already struggling financially.
- William Bud Abbott and Lou Costello: The iconic comedy stars Abbott and Costello were immensely popular in the 1940s and 50s and developed the now infamous act "Who’s on First?" They were featured on the radio, on TV and in movies, but due to overexposure in the 1950s, the public began to lose interest and their act suffered. Both men were ordered by the IRS to pay such a large amount of back taxes that they had to sell their homes and declare bankruptcy.
- Tom Coughlin: The Wal-Mart family and their partners are known for being extremely wealthy, but the former vice chairman of Wal-Mart Stores Inc., Thomas Coughlin nearly went to prison for tax evasion and fraud. Coughlin, who had worked for Wal-Mart for 28 years, was sentenced to home detention and probation in 2008, plus fines and restitutions in 2006.
- Annie Liebovitz: Photographer Annie Leibovitz has photographed celebrities, presidents and other public figures for distinguished magazines and publications, as well as for private clients, but in 2009, she went public with her surprising financial troubles. She apparently had a damaging spending problem, was sued for $15 million by a neighbor, and had to put up as collateral several of her houses and rights to photographs. Luxist.com reports that Leibovitz "was also late in paying $1.8 million in federal taxes in 2007 and 2008."
- Pete Rose: Former baseball star and manager Pete Rose is also one of the most famous tax evaders of all time. He actually had to plead guilty to filing two false income returns. Rose neglected to tell the IRS of any income he received selling memorabilia and autographs or from horse racing. He spent July, 1990 – January 1991 in jail, and paid $366,041 in back taxes.
- Wesley Snipes: Hollywood actor and producer Wesley Snipes is famous for starring in movies like Blade and U.S. Marshals, but he was slapped with a serious fraud charge in 2006. Along with Eddie Ray Kahn and Douglas P. Rosile, Snipes was charged with conspiring to defraud the United States, and Snipes alone was charged with six counts of willingly failing to file federal income tax returns. The charges involved claims going back 10 years. In 2008, he was sentenced to three years in prison, but he is still appealing the sentence and works freely around the world, though he is only out on bail.
- Richard Hatch: Survivor star Richard Hatch won the first season of the reality TV show, earning him $1 million, plus another $10,000 for appearing on the reunion show. Hatch never reported the extra income to the IRS, or the $321,000 he received from appearing on a Boston radio show. In 2005, he was found guilty on 10 counts, and in 2006, he was found guilty of tax evasion. Hatch began serving his 51-month sentence in May 2006, but he was released three years later to home confinement.
- Nicholas Cage: Movie star Nicholas Cage has an Academy Award and was once in the top blockbusters in the 1990s, but his career has been dwindling lately. The City of Angels, Con Air and It Could Happen to You star was the subject of an IRS investigation involving the sale of a home in Louisiana, as well as failed federal income taxes amounting to over $6.5 million. In October 2009, he sued his business manager for $20 million.
- Sophia Loren: Italian movie star Sophia Loren is still considered one of the most beautiful actresses of all time. Loren appeared in movies like Houseboat, The Fall of the Roman Empire and Man of La Mancha, and is the second most awarded actress in movie history. In 1982, however, Loren was imprisoned for tax evasion, and she spent 18 days in jail. Remarkably, her time in prison never seemed to hurt her reputation, and she continues to be one of the most celebrated women in Hollywood.
- Al Capone: Infamous gangster Al Capone was a successful bootlegger and liquor smuggler in the 1920s and 1930s. The Brooklyn-born, Chicago-based criminal used the cover of a used furniture salesman, but he ran one of the biggest crime rings in history and was wanted by the FBI for a number of crimes, including the 1929 St. Valentine’s Day Massacre. That same year, the Bureau of Prohibition began to shut down some of Capone’s breweries, and two years later, he was indicted for income tax evasion and was sentenced to eleven years in jail.