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David Stewart Tax Evasion


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David Stewart Tax Evasion: What is tax evasion? What are tax evasion penalties? What are some celebrities who have been charged with tax evasion? Take a look!

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David Stewart Tax Evasion

  1. 1. David Stewart Tax Evasion David Stewart on Tax Evasion
  2. 2. David Stewart Tax Evasion
  3. 3. David Stewart Tax Evasion • What is tax evasion? • It is the illegal practice of not paying taxes, by not reporting income, reporting expenses not legally allowed, or by not paying taxes owed. • Tax evasion is most commonly thought of in relation to income taxes, but tax evasion can be practiced by businesses on state sales taxes and on employment taxes. In fact, tax evasion can be practiced on all the taxes a business owes.
  4. 4. David Stewart Tax Evasion What is the difference between tax fraud, and a simple mistake? Generally tax fraud or tax evasion involves an intentional wrongdoing. Mere carelessness is not tax fraud. The IRS decides whether tax fraud has been committed by looking for badges of tax fraud. These badges include: • understatements of income; • inadequate records; • failure to file tax returns; • implausible or inconsistent explanations of behavior; • concealment of assets; • failure to cooperate with tax authorities; • engaging in illegal activities; • attempting to conceal illegal activities; • dealing in cash; and • failure to make estimated tax payments.
  5. 5. David Stewart Tax Evasion • What are tax evasion penalties? • The penalties for criminal tax fraud and tax evasion are very serious. They range up to 5 years in jail, plus fines of up to $500,000, plus the costs of prosecution for each separate tax crime.
  6. 6. David Stewart Tax Evasion • Celebrities and Public Figures are often scrutinized for tax fraud and tax evasion. Sometimes they blame it on poor accounting. Many celebrities and public figures have been charged with tax evasion and tax fraud and have gone to jail for it. • In the next few slides, learn about some celebrities and public figures that have been caught evading taxes and were imprisoned because of it.
  7. 7. David Stewart Tax Evasion • Martha Stewart – Tax Evader • She may be a home and garden guru, but she's also a convicted tax evader. Before doing jail time for insider trading, Stewart was forced to pay $220,000 in back taxes and penalties to the State of New York, learning the hard way that East Hampton mansions also generate taxes. Her claim that she hardly spent time there didn't reduce her burden, or appease the state of New York.
  8. 8. David Stewart Tax Evasion • Wesley Snipes – Tax Evader • You know him as Blade, but the IRS knows him as a tax evader that used various means to hide a lofty income. Snipes was found guilty on three counts of failing to file a federal income tax return, owing the government $17 million in back taxes plus penalties and interest. His attempt to pay off a portion of what he owed during his trial to avoid the slammer, failed and in 2008, Snipes was sentenced to three years in prison. He began serving his sentence in December 2010.
  9. 9. David Stewart Tax Evasion • Nicolas Cage – Tax Evader • Cage inspired humor in “Raising Arizona” and sobriety in “Leaving Las Vegas,” but only irony when the star of “National Treasure” contributed to the national debt to the tune of approximately $6 million, according to the IRS' 2009 charge. Accusing his ex-manager and accountant of making poor investment choices in risky real estate and failing to pay his taxes, Cage set out to make good with the IRS, but still paid considerable fines on the taxes. Be careful whom you trust with tax advice.
  10. 10. David Stewart Tax Evasion • Darryl Strawberry – Tax Evader • Mets or Yankees? Strawberry led them both to World Series titles, but like Pete Rose, he stumbled when it came to claiming taxable income. Both can likely recite their stats for every season played, but neither was very good at recalling income from autograph and memorabilia shows. After years of signing away without paying taxes, both received tax evasion convictions. The lesson? If you earn money from it, so should Uncle Sam.
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