What do Annie Leibovitz, Darryl Strawberry and Martha Stewart all have in common?
They’ve all been charged and convicted of tax evasion.
In addition to insider trading, home décor and recipe guru Martha Stewart had to pay a reported $220,000 in back taxes. Photographer Annie Leibovitz owed 2.1 million in unpaid taxes for unreported income from 2004-2007. She will never earn another penny from her photos as she had to relinquish the copyright to every photo she ever took, is taking or will take in a payback agreement. And while professional baseball player (with both the Mets and the Yankees) Darryl Strawberry has great stats on the field, his financial stats are dire. He admitted he cheated the government out of more than $100,000 when he didn’t report his $350,000 income from promotional shows and autographing.
Celebrities are already under the spotlight and probably know the importance of being extra careful. However, perhaps due to ignorance or misunderstanding, mistakes can be made. Sometimes they’re egregious. Here in Minnesota, L’Etoile du Nord or star of the north, tax evasion and fraud can be punished with heavy fines and even prison time according to tax statutes.
At the federal level, all Minnesota residents are also subject to the Internal Revenue Code. It’s a complicated tax code with forms that seem to the uninitiated to be incomprehensible.
Of course if you deliberately underpay your taxes you can be charged with a crime. But even honest mistakes can cause hiccups in your life and unnecessary delays, fees and fines.
If you work in an industry that deals mainly with cash, such as owning a restaurant, car dealership, clothing store, carpentry shop, or hairdressing salon, it’s a good idea to hire a qualified tax preparer or make sure you understand the statutes and what is required when filing your taxes.
However, if you are facing a tax problem of $20,000 or more to the IRS of MN Dept of Revenue it is advisable to contact an experienced tax law attorney such as Max Pridgeon, Attorney at law.