Here’s What Happens if You Mess with the IRS: Cautionary Tales

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Don’t forget how they finally caught Al Capone. It wasn’t for murders or gun-running. It was for tax evasion and IRS fraud. And that wasn’t the end of the Internal Revenue Service’s criminal convictions: According to its annual report, the IRS made approximately 3,000 convictions in 2015 alone. So here are a number of cautionary tales–reminders of how the famous and infamous alike have run afoul of the IRS. And it cost them dearly. In every sense of the word.

“Aunt Bea” – The Oxycodone “Pill Mill” Operator

In 2015, “Aunt Bea” Lang and her daughter were sentenced for illegally distributing prescription drugs at pain management clinics operated by the daughter. Among other things, they were accused of handing out almost 1,000,000 pills across the southeastern United States. But that wasn’t enough. According to sources, like Capone, they also obstructed the IRS and evaded reporting requirements on their business.

The result of their collective wrongdoing and committing IRS Fraud? A lot of pain no amount of oxy could soothe. Aunt Bea was sentenced to 280 months in prison. Her daughter was sentenced to 528 months in prison and ordered to pay $2.7 million.

His Money Was “Gone In Sixty Seconds” – Nicholas Cage

Once listed by Forbes as one of the highest-paid actors of all time, Nicholas Cage is no stranger to the IRS. The Gone in Sixty Seconds star reportedly racked up $13.3 million in tax debt after neglecting to pay the IRS from 2002 to 2004 and again in 2007 and 2008.

According to TMZ, between 1996 and 2011, the Oscar winner made more than $150 million, yet he reportedly blew through his earnings by purchasing dozens of multi-million dollar homes, private islands, exotic cars, luxury yachts and quirky-yet-expensive hobbies. He subsequently claimed to be unaware of his tax debts and potential IRS Fraud, due to a financial manager’s malfeasance.

In 2010, Cage explained, “Over the course of my career, I have paid at least $70 million in taxes. Unfortunately, due to a recent legal situation, another approximate $14 million is owed to the IRS, however, I am under new business management and am happy to say that I am current for 2009. All taxes will be paid including any to be determined state taxes.”

Cage reportedly put $6.25 million toward his debt in April 2012 and another $600,000 in November 2012.

The Florida Payroll Supervisor Who Bled Health Care Facilities Dry

A Florida payroll supervisor assured 17 acute care health providers that his company could manage their payment of local, state and federal payroll taxes to appropriate government agencies.

Instead, he kept the money for himself, embezzling $21 million and committing IRS fraud. The tax shortfall sent the companies scrambling: Hospitals were forced to lay off employees and subsequently reduce their quality of patient care. He was sentenced to 240 months in jail and ordered to pay back all the money.

In case you wondered where the cash went, he was trying to start a charter airline, but the only place it went was “defunct.” Fly-by-night, indeed.

Killing Her Career With Debt – Lauryn Hill

In 2013, former The Fugees member Lauryn Hill spent three months in prison for tax evasion. She’d failed to pay more than $1 million taxes over the course of 10 years. In June 2012, the singer pled guilty to the charges, admitting that she hadn’t paid an estimated $2.3 million taxes on earnings between 2005 and 2009.

Hill told the judge she had every intention of paying her tax debt, but she didn’t have the money after she’d left the music industry. After her release from prison, Hill was given one year of probation, including three months of house arrest. Six months later, she was slapped with seven tax liens, from 2005 to 2011, totaling nearly $867,000.

“Who’ll Buy My Memories? (The I.R.S. Tapes)” – The Willie Nelson Saga

And then there’s legendary country singer Willie Nelson, who famously received a $32 million bill in in 1990. Although the government agreed to a $17 million settlement, Nelson still couldn’t pay his debt. Consequently, the federal government seized nearly all of his assets, but he still owed $15 million.

Which is when Nelson and the IRS came up with a creative solution. The IRS allowed Nelson to record an album titled, “Who’ll Buy My Memories? (The I.R.S. Tapes), in an attempt to raise money. If he could sell four million copies of the album, he’d earn enough to satisfy his debt.

He successfully paid off the tax bill in 1993.

It goes without saying that scamming the IRS and committing IRS fraud is never a good idea. And unless you’re a country superstar, a song-and-dance won’t get you out of trouble. If you need tax advice or help handling your IRS debt, contact Highland Tax Group who can help you make the right decisions.