Richard A. Lindsey, CPA Lindsey & Waldo, LLC – Certified Public Accountants
  • Fighting a $17.5 Million Tax Bill

    Filed under Informational, Taxes
    Apr 29

    Wesley Snipes, best known for his action roles in such films as Blade and Passenger 57, has gone on the offensive against the IRS. Snipes has petitioned the U. S. Tax Court to allow him to enter the IRS’s Fresh Start initiative to lower the amount of unpaid taxes that the IRS is assessing him. Mr. Snipes offered to pay $842,000, but the IRS is demanding the actor pay the full $17.5 million.

    Snipes’ current fight with the IRS is just about civil tax collections. Although convicted in 2008 on three misdemeanor counts of failing to pay his taxes for 1999, 2000, and 2001, he was acquitted of all felony charges. He had followed the advice of a tax protester organization that claimed income taxes were illegal, but ultimately acknowledged his errors.

    Mr. Snipes attempted to bargain with the Internal Revenue Service using an offer in compromise or installment agreement. He was trying to work it out with the IRS. He even paid off amounts for previous years. Mr. Snipes claims in court that the IRS is making arbitrary determinations, and abusing its discretion. After all, the whole purpose of the IRS offer in compromise program is to provide a resolution that is in the best interest of the taxpayer and the government. The idea is to resolve things and move on, keeping the taxpayer in compliance.

    However, as noted elsewhere in this newsletter, the IRS rarely gives up a tax debt if you have the resources or the ability to earn more money to pay the debt in full.

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