Tabloid Tax Stories

7/1/2015

Us Weekly is one of those glossy tabloid magazines you see in the checkout line at your local supermarket. Every week, they run a photo feature called "Stars: They're Just Like Us," revealing slice-of-life gems such as a Bachelorette throwing a ball to her dog in the park, a former supermodel cheering at her kid's soccer game, or Matt Damon adjusting his fly while he waits in line to renew his driver's license. (We're explaining this because we know you would never read anything so frivolous.)  

Here's another way that stars are just like us: they deal with the tax man! Granted, it's not great television, watching the Kardashians pay their quarterly estimates. Still, taxes are just a much a bane of their existence as they are of yours. So let's take a look at some celebrity tax stories making the rounds:

  • Melissa Gilbert, who starred as Laura Ingalls in the family drama Little House on the Prairie, is facing a $360,000 lien for unpaid federal income taxes. While we can't be privy to the exact circumstances, the actress, who has since served as President of the Screen Actors Guild, reports that the recession hit her hard. "That, plus a divorce and a dearth of acting opportunities the last few years, created a perfect storm of financial difficulty for me. " Gilbert, her husband, and their two boys currently live in a log house in Michigan, which she refers to as "our own Little House in the Big Woods," and says she has negotiated a plan with the IRS to make good on her debt.
  • Presidential candidate Carly Fiorina may be barely cracking 1% in the polls, but she's jumped to an early lead in the financial disclosure race. The former Hewlett-Packard CEO has already released her federal returns, along with a 503-page financial disclosure pegging her net worth at $58,954,494.88 (because $60 million would just be scandalous). But then, last week, she opened up her state tax returns as well. And while Fiorina lives in Virginia, her various business and investment interests force her to file tax returns in a total of 17 states. The end result of those state tax returns is a 1,000-page stack of paper that ought to keep her former company's printers humming profitably for some time.
  • Former House Speaker Dennis Hastert is in hot water following revelations that he paid $1.7 million in hush money to conceal former "misconduct. " Prosecutors have indicted him for failing to report cash transactions and lying to the FBI. It's been an incredible fall for Hastert; a decade ago, he was two heartbeats away from the presidency, and now his life is an episode of the Maury Povich show. But the IRS will, surprisingly, have no problem with that. In fact, Hastert can plausibly claim a theft loss deduction for payments exceeding 10% of his adjusted gross income. While the indictment doesn't tell us if Hastert's blackmailer reported the payments as income, (and while we can safely assume Hastert didn't issue a 1099!) this is one case where the IRS might actually make a celebrity's troubles a little easier.