Friday 25 April 2008

A lesson in bad tax planning

Wesley Snipes was found guilty on misdemeanor charges of failing to file tax returns. Even though he was acquitted of more serious felony charges of tax fraud and conspiracy, and had made a payment of $5 million towards his tax liability (the exact total owed is disputed, but could be as much as $15 million), he was sentenced to three years in prison.

This highlights that even when you rely on others to manage your finances or prepare your taxes, ultimately it's your money and your responsibility. Even though jurors accepted his argument that he was innocently duped by errant tax advisers, this didn't exempt him from prosecution.

I find the sentence a bit harsh (then again, US courts have convicted children to the death penalty, so I'm not surprised by the vagaries of sentencing in the US), but I'm more surprised that someone of Snipes' resources didn't shop around and get competent tax advice.

Copyright Enough Wealth 2008

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