“Pharma Bro” Martin Shkreli is best known for hiking the prices of life-saving medications by an astounding 5,000 percent. He has also made waves with his snarky commentary on the pharmaceuticals industry. These actions, while reprehensible in the eyes of his detractors, did not lead to his recent incarceration. Rather, he got in trouble with the law because he committed securities fraud and failed to pay his taxes. The following are a few key lessons he’s recently learned the hard way:
Unusual Assets Can Be Forfeited to the IRS
Don’t assume you’re safe from IRS forfeiture merely because you don’t own a house or a valuable car. Any items of value can be used to pay off your debt. For example, the IRS wish list for Shkreli’s case included the Wu-Tang Clan album “Once Upon a Time in Shaolin.”
Passage of Time Will Not Make the Problem Go Away
Martin Shkreli made the fatal mistake of hoping his tax issues would simply disappear. He was hit in 2016 with a $4.6 million lien primarily aimed at recovering taxes from 2014, although he also failed to pay several thousand in 2013. Had he negotiated with the IRS from the very beginning, he may have avoided such an extensive lien. An insider claims the lien was filed because “we had made a demand for payment of this liability, but it remains unpaid.”
More recently, Shkreli has been asked to forfeit $7.36 million worth of assets as a criminal penalty. The IRS and state of New York are mired in conflict over who gets that money first. The IRS claims that the federal tax bill came first and should, therefore, be paid off first.
You might not be the next Pharma Bro, but that doesn’t mean you can move forward without strong legal counsel. Contact the Highland Tax Group today to learn more about your options for dealing with the IRS.