The actor behind vampire-hunting Marvel superhero Blade, Wesley Snipes was making headlines a few years back due to his ongoing tax battle with the IRS. Let’s take a look as his case.
Snipes’ tax woes first hit the limelight back in October 2006, after he was charged with felony tax fraud and conspiracy. While acquitted of the felony charges, Snipes was ultimately convicted of three misdemeanor counts of failing to file tax returns between 1999 and 2004 and was sentenced to a stint in jail. Though Snipes and his team argued his conviction and insisted that the actor was not granted a fair trial, the U.S. Supreme Court upheld the ruling the ordered Snipes to serve out his 3 years from 2010-2013. Upon his release in 2013, the actor still owed a whopping $23.5 million in back taxes from 2001 through 2006. Snipes made an offer in compromise (OIC) of $850,000 — equating to barley 4 percent of his total debt. An officer from the IRS was sent to determine Snipes’ assets and financial condition and Snipes refused to cooperate with the investigation. The officer denied his OIC, which then prompted Snipes to accused the IRS of abusing its discretion and took them to court. Not surprisingly, the tax court sided with the IRS.
The IRS went on to reduce their settlement offer to $9.5 million, while Snipes refused to increase his original offer citing the “economic hardship” that paying the bill would cause. Snipes was denied on the grounds that he did not meet the criteria for economic hardship which usually applies in cases of long-term illness, medical condition, disability, or monthly income being exhausted from caring for dependents.
The IRS’ decision to deny Snipes’ low OIC was upheld again by U.S. Tax Court Judge Kathleen Kerrigan in November of 2018 with the judge stating that accepting Snipes’ OIC would not be in the best interests of the United States.
McCauley Law Offices has the experience needed to work with the IRS and ensure you settle your Tax Jam for the best possible price. Contact us today for a free consultation, and we will walk you through your options and develop a course of action with your best interests at heart. When the IRS knocks, let us answer!