Mar 29th 2013
By Teresa Ambord
Singer Dionne Warwick's back taxes are paid up now, said her publicist. The taxes are paid, but because some of those taxes went unpaid for almost two decades, she still owes $10.2 million in penalties and interest. Ouch!
Nearly $7 million of that is owed to the IRS for the years 1991 to 1999, and $3 million in business taxes is owed to the state of California.
Her publicist, Kevin Sasaki, told reporters, "In light of the magnitude of her tax liabilities, [Dionne] Warwick has repeatedly attempted to offer repayment plans and proposals to the IRS and the California Franchise Tax Board for taxes owed. These plans were not accepted, resulting in escalating interest and penalties. Although the actual amount of back taxes owed has been paid, the resulting penalties and interest has continually accrued."
In March, Warwick filed for Chapter 7 bankruptcy protection in New Jersey, where she's a resident of South Orange. Court documents show she has $25,500 in assets, mainly consisting of two fur coats and two pairs of diamond earrings, plus ordinary household items like furniture, a laptop, and clothing. She lists her average monthly income (which includes Social Security and a pension) as $20,950, and average monthly expenses as close to the same – $20,940.
Court documents also show she owes a former manager about $50,000 and another $20,000 in Visa credit card debt. And then there's that other little item . . . $10.2 million owed to the IRS and California.
David L. Neale, a Los Angeles bankruptcy attorney not involved with Warwick's case, told reporters that based on the facts of the case, the singer may actually get a clean slate, even for the tax debt. That's because her tax obligations reach so far back, they would most likely be considered dischargeable.
"That kind of tax liability suggests that there was a period when she was making a lot of money and through mismanagement or her own negligence didn't pay her taxes. Now that her income has declined dramatically, she is dealing with this $10 million tax problem."
It's not new for a celebrity to blame financial disasters on a bad manager, said Neale. They do it all the time, even though they're the ones who generally hire those managers. "There are no specific requirements to be a business manager," he said. "An artist can hire a friend or family member who doesn't know what he's doing or is dishonest and, by trusting the person, winds up with debts they don't even know they owe."
Warwick, now seventy-two, gained fame for hits like I Say a Little Prayer, Walk on By, and Do You Know the Way to San Jose. She's a cousin of the late Whitney Houston.
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