11 / 03 / 11

The 8 Most Famous Tax Scandals!

History has its share of famous (and infamous) people who have made attempts to cheat the IRS and paid the price...

  • Heidi Fleiss

In 1997, Fleiss, the "Hollywood Madam" grabbed headlines for being arrested in an undercover sting operation on the High-Priced Prostitution ring that she operated for 2 ½ years. Speculation as to what celebrities were contained in her 'little black book' fueled the fire for the press. She was convicted on charges of tax evasion, money laundering & conspiracy and served a 21 month sentence.

  • Boris Becker

The tennis great who burst on the scene in 1985 winning Wimbledon as an unseeded teenager was convicted of tax evasion by the German Government in 2002. After a 10 year investigation, Becker finally admitted to failing to pay $1.7m euros between 1991 and 1993. Becker apparently had kept an apartment in Munich while listing his residence in Monaco, a tax haven. Becker retired from professional tennis in 1999, stating "This tax issue hasn't let me sleep soundly since the first search of my home. It is telling that I was not able to win a tournament after that. I later ended my career."

  • Joseph Nunan:

In probably the most ironic tax evasion case of all time, former IRS Commissioner Joseph Nunan was convicted of tax evasion in 1954 for not claiming his earnings from an $1800 bet he made that Harry Truman would win the presidency. In a bizarre twist of fate, Nunan had served as IRS Commissioner just a few years from 1944-1947. He served 5 years in prison and paid a $15,000 fine.

  • Al Capone

In possibly the most famous case in IRS history, Al Capone, the notorious gangster, was convicted on 5 counts of tax evasion from 1925-1927 and willful failure to file for 1928-1929. Capone was once quoted as mockingly suggesting "the government can't collect legal taxes on illegal money." He was sentenced to 11 years in Federal Prison (including the notorious Alcatraz) and paid $80,000 in fines.

  • Daryl Strawberry

In 1994 Baseball great Daryl Strawberry was fined $350,000 in back taxes, penalties and interest, six months of house confinement and 100 hours of community service. Strawberry admitted to failing to pay taxes on income he earned for autograph-signings and personal appearances from 1986-1990.

  • Chuck Berry

After touring for years on the "oldies circuit" in the 1970's, where he was often paid in cash by promoters, Berry attracted the ire of the IRS as being a tax evader. In 1979 he served 4 months in prison and was ordered to perform 1000 hours of benefits shows.

  • Willie Nelson

As a result of falling for some bad "tax shelter" advice, in 1990, Nelson was charged with more than $16 Million in unpaid back taxes. The IRS seized most of his assets, including his houses & recording studios. Nelson agreed to record an album (called "Who'll Buy My Memories: The IRS Tapes) and give all of the proceeds to settle his debts. From sales of the recording and other assets, the IRS generated $3.6 Million. They agreed to accept payment of $9 Million over the following 5 years to settle the debt.

  • Spiro Agnew

On October 10, 1973, Spiro Agnew resigned the vice- presidency of the United States after pleading no-contest to charges of tax evasion and money laundering. Agnew had accepted $29,500 in bribes as the Governor of Maryland from the construction industry in exchange for approval of their projects. He received 3 years probation and a $10,000 fine in a plea bargain agreement. He was later disbarred by the State of Maryland.