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Celebrity Tax Evasion Stories

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It’s not a secret that the accounting profession is widely known as ‘boring’. I see posts and memes about this as I scroll through the internet so thought I would purposely try to find some interesting stories related to accounting. I decided on celebrity tax evasion, here I’ll tell you the juiciest tax stories and try to make it as interesting as I possibly can!

Taxes are one of the most frustrating and unavoidable obstacles that must be encountered by basically everyone. It’s what holds us together; without it, there would be no roads, schools or emergency services. No matter who you are or what you do, there’s one thing for certain, if you are alive and working, the tax man wants a cut of your earnings.

Here is a list of some celebrities who tried to dodge the tax man:

Dolce and Gabana:

This was one of the most famous and widely discussed cases of celebrity tax evasion of all time. The case sent the fashion world into meltdown and it lasted nearly a decade before finally coming to a close. The two designers were sentenced to 18 months imprisonment and a fine of 10 million euros was also imposed over avoidance of payments in Italy, where corporate taxes are among the highest in Europe.

Gary Barlow:

In 2014 Barlow along with a couple of Take That members invested £66 million into two partnerships styled as music industry investment schemes. A judge ruled that 51 partnerships set up by the company were intended to secure tax relief for members. Take That’s lawyers insisted that the band mates believed the investments were legitimate but they had to repay more than £20 million to HM Revenue & Customs.

Ja Rule:

He is a Grammy-nominated hip hop artist who was well known in the 2000s. He’s mostly known nowadays for his role in the Fyre Festival; a fraudulent music festival in the Bahamas. He was sentenced in 2011 for tax evasion due to not filing his tax returns between 2004 – 2006. In his own words, the reason for his tax troubles was that “he was a young man who made a lot of money” but “didn’t know how to deal with these finances.” He was required to pay $1.1 million and spent some time in prison for tax evasion along with a separate criminal possession charge.

Wesley Snipes:

He acted in 8 movies between 1999-2004 earning approximately $38 million dollars however, he didn’t pay income taxes for any of this. In 2010 he was sentenced for committing six counts of failing to file tax returns, one count of conspiracy and one count of fraud (but was only charged for 3.) He avoided $7 million in taxes by listening to an accountant who claimed you did not have to legally pay taxes.

Lionel Messi:

Barcelona star Messi and his father were both prosecuted by the Spanish Supreme Court in relation to tax fraud in 2016. The court said they had used tax havens in South America as well as shell companies across Europe to avoid paying taxes totaling over €4 million between 2007 – 2009. The outcome of the trial saw Messi receive a 21 month prison sentence, although Spanish Law allowed him to serve this on probation.

David Beckham:

He was among more than 1000 people who invested in the Ingenious film financing schemes in the hope of securing tax relief. Other celebrities such as Ant and Dec, Bob Geldof and Wayne Rooney also bought in. HMRC said Ingenious claimed relief on artificial losses from its film meaning the schemes were not legitimate opportunities but actually means of avoiding tax. Those who used the Ingenious scheme had to invest at least £100,000 and were promised generous tax breaks on any losses incurred, many subsequently claimed they were unaware of the risks. The celebrities involved lost the legal battle to overturn their £700 million tax bill. Tax avoiders have since been prevented from being rewarded with knighthoods due to their poor financial behaviour. HMRC believe that this is not consistent with the award of honour.

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