The most famous tax cheats
The knotty problem of tax evasion is at the top of the government regulatory agenda. Entrepreneurs, gamblers and other tax-liable individuals have always tended toward evading tax. And even if the majority of businesspeople are complying with the tax laws, there are still hundreds of thousands of dodgy tycoons who are looking for proven ways and means of evading their taxes.
Some entrepreneurs have even gained their popularity purely because of their tax payment problems, rather than their prominent role as a bright businessman. And at some point, you must have stumbled upon some business world household name who has ended up being one of the most famous tax cheaters. This article covers the most notorious tax cheats. But before moving on to the “infamous” list, let’s get a clear picture about what tax evasion actually is; and let’s have a look at the main principles the authorities tend to follow when imposing taxes.
So, what is tax evasion anyway? This term refers to the phenomenon whereby individuals or organizations illegally and deliberately circumvent their duty of paying certain taxes. Specifically, tax evasion involves unreported income: there is a “gap” between the income amount one is obliged to report, and the amount one actually does report.
General Types of Taxes in the US
In the United States, the tax mechanism is very diverse and complex. Taxes imposed on American residents fall into several categories. Here are the most common categories of taxes: income tax, payroll tax, unemployment tax, consumption tax, and property tax.
Income tax is a tax that varies with the respective income or profits gained by individuals. This tax increase as the taxable income builds up.
Payroll tax is imposed on employers or employees and is computed as the amount of the salaries paid to the staff by employers.
Unemployment tax is imposed on employers in order to fund unemployment organizations and thereby provide financial support to laid-off workers.
Consumption tax is levied on the purchase of goods or services.
Property tax is levied according to the value of any owned property.
“Coolest” Tax Evaders so Far
The time has come for us to get closer to the core of this article and list the most outrageous and famous tax dodgers! So, let’s get rolling.
Once a professional and bright baseball player, Roses promising sports career instantly took a turn for the worse as he became one of the famous gamblers charged with tax evasion. After filing a fake income in 1990, Rose pleaded guilty to two charges and sentenced to five years in jail. Later in 2009, Pete was failed to report about $120,643.41.
Accused of one count of tax evasion, Strawberry was sentenced to three months in jail, on top of three months of house arrest. According to the source, Darryl failed to report about $500,000 of his income and thus was ordered to pay $350,000 in back taxes.
This notorious but also genuinely talented actor was charged with failing to file his income tax return for several successive years; as well as falsely claiming tax refunds of over $12 million. As a result, Snipes was sentenced to three years in jail in 2008. Later on, in 2011 he filed an appeal; only to have it declined by the United States Supreme Court. After serving his three-year sentence in the Pennsylvania federal prison, Wesley was released in April 2013.
By far the most strikingly notorious and fraudulent gangster in history, Al Capso came to grief when his classy mobster’s empire broke down (after his prosecution for tax evasion in 1931!) After this, “Scarface” was convicted with tax evasion, sentenced to 11 years in prison, and ordered to pay more than $200,000 to the state authorities.
Kozlowski is known to most financial industry insiders as a filthy rich Tyco CEO and passionate art admirer. Sadly, he ended up getting accused of triple tax evasion: failing to report his income of $81 million in unauthorized bonuses; an unreported $20-million payment fee in his role of a former Tyco chief executive officer, and, lastly, the purchase of paintings worth $14,725 million. Hence, the tax-dodging tycoon was sentenced to up to 25 years in jail.
An infamous illegal gambling business owner, Siebert pleaded guilty to a two-count federal charge of tax evasion after operating his Chicot Game Room for about ten years. According to the source, the cunning entrepreneur was ordered to pay $331,821 to the IRS, and over $1 million in proceeds he had gained from the gambling operation.
A scandalous and bawdy commercial voyeur, Francis was caught cheating on taxes over $20 million, which led to a guilty plea and a community service sentence. Despite denying all the accusations, as well as hiring some “upmarket” specialists to make his reputation seem completely pure and spotless, the exhibitionist franchise owner still had to pay his immense price to the IRS.
A mind-blowingly lucky winner of a $1 million prize for the reality show “Survivor,” Hatch opted for avoiding tax on his once-in-a-lifetime winning; he ended up with a nine-month jail sentence, which could even have ended up being a 13-year sentence! Well, that seems to be yet another irrefutable proof of how hellishly lucky this guy is!
After failing to pay about $1 million to the IRS, this music celebrity ended with winning a rather different “fame” among tax authorities and the court – Hill was given a three-month jail sentence, after pleading guilty in 2012. Initially, Lauryn’s sentence was to range between 24 to 35 months; but in the end, the court agreed upon 90 days or so.
O. J. Simpson
In 2007, Simpson was accused of failing to pay $1.4 million in taxes. Shortly after, the tax cheater was arrested for robbing a Vegas casino, claiming he was taking his belongings back. Consequently, Simpson was given a nine-year sentence; this didn’t cover his tax problems. Only the break-in! Well, maybe the court was too deeply involved in his theft case and decided to leave the tax case be.
The Outlook for Tax Evasion
The problem of tax evasion is getting more serious over time. The regulatory systems that are currently being applied in order to eliminate tax evasion do seem to have some success in improving the general picture of tax obedience. However, there is still an extensive amount of malfeasance with regard to tax fraud. Experts recommend implementing a series of more rigid regulatory acts, so as to reduce the risk of tax evasion.