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Sir Elton Sues The Times

August 9th, 2012 No comments

English singer-songwriter Elton John has been very active in off-stage matters throughout his career, particularly with charity work. His website offers details about his involvement with the Elton John AIDS Foundation, Lunch Around the World, and the Gus Dudgeon Foundation.

Of course, a charity’s integrity is of paramount importance when seeking to maintain significant donations. So Sir Elton wasn’t too thrilled when British newspaper The Times implied that the musician had followed the guidance of accountant Patrick McKenna, who is accused of advising British film investors to abuse film tax breaks. The Times ran two stories on the topic, both containing the byline “the secrets of tax avoiders.”

BBC News is reporting Elton John has sued The Times for libel over The Times’ insinuations.

Sometimes you hear about celebrities suing for defamation or libel. What’s the difference?

Here in the States, libel is a type of defamation. Another type of defamation is slander.

Slander is defamatory matter addressed to the ear. It is usually unpremeditated, spoken ad lib, with limited circulation.

Libel is defamatory matter addressed to the eye, such as writings, pictures and statues. Libel suggests forethought and achieves permanence through print or other permanent form.

A public figure asserting defamation must demonstrate the defendant’s statement was made with “actual malice,” or knowledge that the statement was false or with reckless disregard of whether it was false or not.

After publishing the articles, The Times published a correction, stating that Patrick McKenna never served as Sir Elton’s accountant.

Clearly, Elton and his lawyers were left unsatisfied with the apology. Perhaps you are left satisfied with the short defamation lesson previously taught to me in torts class during law school.

Coachella Likely Staying Put

July 8th, 2012 No comments

Just last week I wrote about a proposed city tax that threatened the promoters of the Coachella Valley Music and Arts Festival to find a new venue.

The threat is gone, for now.

The Indio’s Desert Dun reports City Council member Sam Torres has suspended the effort to impose an admissions tax.

Indio City officials are looking to reach a long-term agreement with Goldenvoice, the Coachella event promoter. I’d be hesitant as a promoter to commit to staying in Indio unless there are assurances that any admissions taxes enacted after the date of the agreement do not apply to the agreement.

Proposed Tax Puts Coachella Venue In Doubt

July 5th, 2012 No comments

The Coachella Valley Music and Arts Festival (“Coachella”) is an annual music festival held during April at the Empire Polo Club in Indio, California. The club sits in the Inland Empire’s Coachella Valley. The festival is known for springboarding the careers of emerging musicians, particularly in the rock, indie, hip hop, and electronic genres.

Beginning in 2014, Coachella may relocate due to a proposed city admissions tax, according to a story reported by the Indio’s Desert Sun.

The Indio tax would be five to ten percent on admissions to entertainment events with more than 2,500 in attendance.

via Wikipedia

Coachella is organized by Goldenvoice. Goldenvoice President Paul Tollett estimates the tax would cost $36 per ticket sold, or $4 million to $6 million to the promoters for the Coachella event. Assuming a ten percent tax, a simple calculation reveals ticket prices are $360 a pop and that the event draws well over 100,000.

The tax is far from a reality at this point, however. The Indio City Council turned down consideration of City Councilman Sam Torres’ proposal. Torres intends to amass signatures on a petition so the proposed tax is put before voters on a November ballot. Torres has until August 10 to obtain the necessary signatures.

Tollett insists he won’t pass the cost on to customers. He says that now likely because he doesn’t want to seem like the bad guy for a suddenly political issue. But if the measure gets on a ballot and passes, he may have no choice if finding a new venue proves too difficult.

Trapped by the IRS

June 14th, 2012 No comments

TMZ is reporting American singer-songwriter R. Kelly owes the IRS over $4.8 million in back taxes. The balances due:

via Wikipedia

2005 – $1,472,366.77
2006 – $710,520.51
2007 – $376,180.11
2008 – $1,122,694.90
2009 – $173,815.18
2010 – $992,495.24

Kelly is probably best known for his hit “I Believe I Can Fly,” which was featured on the soundtrack to the 1996 film Space Jam.

More recently, Kelly wrote and directed the popular hip hopera series “Trapped in the Closet.” Last March Kelly confirmed a new set of videos for the series will be released later this year.

Kelly’s representative said the artist “is in the process of working everything out with the government and is confident that all his obligations will be satisfied.”

A revenue-sharing agreement with the IRS on proceeds received from the new “Trapped in the Closet” videos would not be the first of its kind. See Willie Nelson.

Categories: IRS, Music Tags:

Never on Time, Results in Time

July 18th, 2011 1 comment

Ja Rule is an American rapper from Queens, NY. His song “Always on Time,” featuring Ashanti and released in 2001, was Ja Rule’s second Hot 100 number one single. Unfortunately for Ja Rule, he wasn’t on time with filing his tax returns from 2004 to 2008. In fact, he never filed his income tax returns for any of these years, and failed to pay any federal taxes on his $4 million in income earned over that time.

Earlier today, Ja Rule was sentenced in federal court to 28 months in prison for failure to file his tax returns. In court, Ja Rule attempted to explain to the judge what had happened:

“I was a young man who made a lot of money…. I didn’t actually know how to deal with these finances … [and] I didn’t have the best people guide me, so I made mistakes.”

We’ve heard this kind of story countless times. I’m not saying I don’t believe him. It just pains me to see time and time again people who are too young to suddenly become millionaires. When in the large spotlight for the first time, the immature naturally put little to no thought towards properly addressing financial matters.

Ja Rule was already 28 years old when his tax problems began. Perhaps he doesn’t neatly fit the type of person I describe above. Nevertheless, you’d think preventative measures are readily available that can steer the young and naïve in the right direction. As we’ll continue to see young people earning a fortune early in life, I believe the primary problem here may be the lack of overall effort towards connecting the vulnerable with a competent adviser long before mistakes are made. Ascertaining what it takes to overcome that problem, unfortunately, is likely a problem onto itself.

Categories: Music, Tax Fraud Tags:

Country Great Turns Seventy-Eight

April 30th, 2011 No comments

Although country music isn’t for me, I understand it is for a lot of others.  Either way, you gotta love American country singer-songwriter Willie Nelson.  Today marks his seventy-eighth birthday.  Happy birthday Willie!

Like many American entertainers, Willie has experienced his fair share of both ups and downs over the years.  Also like many American entertainers, Willie at one point naively placed far too much trust in others with his financial affairs.

In the 1980s, Willie made some investments in a tax shelter, following the recommendation of his accountants.  The IRS later disallowed the tax implications of the tax shelter, generating back taxes owed to the IRS.  After it was also discovered his accountants failed to pay his original taxes over multiple years, Willie Nelson was stuck with a tax bill in excess of $16 million.  Unfortunately, Willie was a free spender, and didn’t have the funds to immediately pay up.

On November 9, 1990, the IRS seized Willie’s assets in order to collect on the debt.  Willie was deeply in the red at the time; his Texas ranch was auctioned by the IRS in January 1991.

In order to address his remaining outstanding IRS debt, Willie turned to what made him famous across America: songwriting.  In June 1991, Willie released a compilation album entitled The IRS Tapes: Who’ll Buy My Memories?, under a strict revenue-sharing agreement with the IRS.  In 1993, Willie was finally square with his obligations to Uncle Sam.

As you can see, the IRS is open to unconventional methods of payment for back taxes.  It’s all a matter of acting in good faith to address an outstanding balance.

Categories: IRS, Music Tags:

Lil Wayne Slapped with $5.4 Million Tax Lien

April 4th, 2011 No comments

Another celebrity, another federal tax lien.

It’s no secret that the IRS is targeting the rich.  Indeed, federal and state tax agencies operate most efficiently when they pursue the deepest pockets.  The latest victim: American rapper Lil Wayne.

The IRS recently filed a federal tax lien on Dwayne Michael Carter, Jr.’s Miami residence, which is currently on sale for just under $13 million, to secure back taxes of $3.35 million for 2008 and $2.26 million for 2009.  The house is rather nice to look at, but it needs a new owner.

Another American rapper, Ja Rule, recently pleaded guilty to federal income tax evasion in federal court in Newark, NJ.  Ja Rule admitted to failing to pay taxes on over $3 million in income earned between 2004 and 2006.  He faces sentencing in June.

It’s unfortunate to see time and time again musicians who quickly rise to the top fall from their fame just as quickly.  One can only hope the innocent learn from the others’ mistakes.

Categories: IRS, Music, Tax Fraud Tags: ,
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