Snipes Fights IRS After Stint in Club Fed

Photo Credit: nicolas genin
Photo Credit: nicolas genin

I doubt there is a person on the planet that would opt for giving away a huge chunk of their hard-earned money to a government agency for taxes rather than keeping it themselves if they didn’t have to. Attempting to avoid paying taxes by claiming that someone led him down the primrose path of believing that income taxes are illegal is what got actor Wesley Snipes into hot water with the IRS in the first place. He avoided paying taxes from 1999 to 2001 to the tune of millions for which he ultimately spent 3 years in prison.

Celebrities often get into trouble with the IRS. They often offer some of the most laughable and creative excuses for why they should be absolved from paying taxes. One of the most hilarious accounts posted on efile.com is from Martha Stewart who “owed $220,000 on an estate she owned, claiming that she wasn’t there enough, so she shouldn’t pay them. The IRS disagreed and forced her to pay the amount in 2002.” 

When Snipes was released from prison in April 2013, according to Forbes, the IRS issued him a $24 million tax lien. Snipes subsequently petitioned the U.S. Tax Court to allow him to enter the IRS’s Fresh Start initiative and lower the amount of unpaid taxes that the IRS is assessing him. The IRS denied Snipes’ offer to pay $842,000 and is instead demanding the actor pay $17.5 million.

As any tax attorney knows and as Forbes clarifies, “The IRS launched the “Fresh Start Initiative” on May 21, 2012, in IR-2012-53. This initiative revised the offer in compromise (OIC) program to make its terms more flexible. The idea was to enable more of the most financially distressed taxpayers to resolve their tax problems.” 

It’s difficult to know how truly ‘distressed’ Mr. Snipes’ financial situation is. Every situation is relative. However, anyone who makes enough money to owe $24 million in taxes hardly elicits great sympathy especially when they attempted to avoid paying taxes altogether. In some cases it’s really difficult to know who’s the underdog and who’s the super villain. Mr. Snipes seems to think the IRS is the super villain, but this could be a true case of role reversal.