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Tax Cheats and Tax Deductions: The Messy Work of the IRS

tax cheats and deductions; messy work of the IRS Click to enlarge

What finally did in Al Capone? It wasn’t all the murders, rum running and bookmaking. The infamous mobster went to prison because of a far more mundane crime, tax evasion.

That’s right, the feds finally nabbed Capone on charges that he failed to pay $80,000 in federal taxes.

Capone, though, is far from the only famous tax cheat in U.S. history. A wide variety of celebrities and entertainers have somehow forgotten to pay all the taxes they owe to the U.S. government. Coincidence or by design? You’ll have to decide that for yourself.

Cooking Up Tax Trouble

Chef, publisher and homemaking goddess Martha Stewart made headlines when she was found guilty of failing to pay $220,000 in taxes. Stewart, who never met a doily she didn’t like, was sent to prison.

Of course, the affair hasn’t cost her too much. Stewart’s television shows and magazines are still big hits. Who knows? Maybe the time behind bars helped the domestic diva build some street credibility among her fans.

Tax problems didn’t seem to slow opera superstar Luciano Pavarotti, either. The man with the golden pipes had a bit of a golden touch, too. He earned enough to be convicted of failing to pay a whopping $11 million in taxes.

Somewhere Over the Rainbow, That’s Where Those Taxes Are

Then there’s Wizard of Oz diva Judy Garland. The talented actress and singer certainly had her own serious problems with addiction. But Garland also apparently had trouble remembering to pay her taxes. The singer with the booming voice ended up owing the government $4 million in unpaid taxes. She wasn’t allowed to pay it off with those ruby slippers.

Finally, we’ll all remember O.J. Simpson for the part he played in the murder trial of the century. But while Simpson was declared not guilty in that case, too much criticism, he was found guilty of another crime: failing to pay $1.5 million in taxes.

The Biggest Cheats of Them All

When it comes to the biggest tax cheats of them all, though, you might be surprised; they’re not exactly household names.

Unless, of course, you’re a fan of girls behaving badly, very badly.

Joseph “Joe” Francis hit upon a novel, if rather sleazy, way of making big profits. He made and sold videos of drunk college girls flipping up their t-shirts. That’s right, he’s the founder of Mantra Films, the producer of the Girls Gone Wild series of DVDs.

Francis hit it big with this scheme, proving that it truly is impossible to underestimate the stupidity of the average U.S. consumer. But Francis “forgot” one important thing. He failed to pay a lot of taxes!

The government eventually accused Francis of charging more than $20 million in false business expenses when he filed his taxes in 2002 and 2003.

Francis, though, is almost small potatoes when compared to the mastermind of tax evaders, Walter Anderson.

Anderson ranks as the biggest tax evader in U.S. history. He managed to hide most of his income by setting up off-shore companies in Panama and the U.S. Virgin Islands.

How much money did Anderson hide? Who knows? But the U.S. government did require Anderson to come up with $200 million in unpaid taxes.

There’s a lesson here: If you’re going to cheat on your taxes, save your money. The odds are good that you’re going to get caught eventually.

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