The Internal Revenue Service is a thorn in the side of everyone — even the rich and famous, and infamous. The IRS can garnish wages, freeze bank accounts, and even seize property to pay the money owed to them. And if you’re convicted of certain tax-related illegal activities, you can go to jail.
Celebrities have as much reason to fear this as the average citizen, and possibly more. When celebs get in trouble for tax evasion, it seems they either believed their status would protect them, or they trusted the wrong person with their financial information. Tax evaders can face felony charges, and, if convicted, up to five years in prison and $100,000 in fines, in addition to the money owed the IRS. The following celebs all went to jail as a result of tax evasion, although for the most part they denied deliberate fraud.
The rock legend spent the 1970s touring the country, playing clubs and getting paid in cash. Berry failed to report this as earned income, however, and later pleaded guilty to tax evasion in 1979 for willfully falsifying income information on a tax return. Berry spent four months in jail. After his release the judge ordered Berry to perform 1,000 hours of community service, in the form of benefit shows.
This famous baseball player “forgot” to claim income from autograph and memorabilia shows, and ended up pleading guilty in 1990 to two charges of filing false income tax returns. He was fined $50,000 and sentenced to five months in a medium-security prison camp in Illinois. He also had to pay $366,000 in back taxes. Upon his release he spent three months in a halfway house and performed 1,000 hours of community service.
Actor Wesley Snipes, star of “Blade” and other action movies, was indicted in 2006 on several counts of tax evasion, including failure to file tax returns and filing false returns. Snipes said he was unfairly targeted by prosecutors because of his fame, and sent a 600-page letter to the IRS after the indictment claiming, among other things, that the IRS deceives people to “terrorize, enslave, rape or pillage” American citizens. He also claimed to be a “non-resident alien” despite being born in Florida. Although the actor was acquitted in 2008 on two felony counts of conspiracy to defraud the government, he was found guilty on three misdemeanor counts of failing to file tax returns and sentenced three years in prison, the maximum penalty for those charges. Snipes lost on appeal and reported to a federal prison in Pennsylvania to begin his sentence on December 9, 2010.
As the first “Survivor” millionaire, Hatch argued that he wasn’t guilty of tax evasion because he believed that CBS had paid the taxes on his million-dollar win — even though there was clear language in the Survivor contract that the winner was responsible for income taxes on his winnings. Hatch was convicted in 2006 of tax evasion and sentenced to 51 months in prison, plus three years of supervised release after serving his sentence. The verdict stated that Hatch evaded taxes on his Survivor winnings, on $327,000 he earned as co-host of a Boston radio show, and on $28,000 in rent on property he owned. On a failed appeal, Hatch claimed his original trial judge prevented him from arguing that he had made a deal with CBS that the network would pay his taxes if he won because he caught the network smuggling food to other Survivor contestants. Hatch was released from prison in October 2009.
Yup. In 1982 the Italian screen legend served 17 days of a 30-day sentence in a Naples, Italy jail following convictions on tax evasion charges for both herself and her husband, Carlos Ponti. Loren filed a petition for pardon, saying her accountants had made an error; at the time she and Ponti had been under investigation for tax and currency violations for nearly a decade in Italy. Ponti was convicted in absentia in 1979 of smuggling money and works of art but was cleared in 1990. The actress says the tax evasion charges were the result of a $7,000 discrepancy on a 1970 tax return, but her incarceration only served to make her more popular in Italy and prompted her eventual permanent move to Switzerland.