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IRS to MC Hammer: We Can Touch This

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Posted by AccountingWEB in Tax, Watchdog, Celebrity News on 12/13/2011 - 10:41

Owes $779,585 in back taxes
Net worth of more than $33 million in early '90s
Filed for bankruptcy in 1996 for $13 million in debts

By Ken Berry

It's Hammer time: The Internal Revenue Service (IRS) is going after MC Hammer for $779,585 it claims he owes in back taxes dating back to 1996 and 1997. According to entertainment news outlet TMZ, the federal government has initiated a lawsuit to recover the tax debt from Hammer (real name Stanley Kirk Burrell).

The forty-nine-year-old Oakland native, best known for his hits songs U Can't Touch This and Too Legit to Quit, filed for bankruptcy in 1996 after piling up debts of approximately $13 million. In his heyday in the early nineties, Forbes magazine had estimated Hammer's net worth to be more than $33 million. But apparently, his spending habits were even larger than the oversized pants he was famous for wearing in his performances and videos.

"I didn't just take money and say, 'I want to be a blessing to myself,'" Hammer said. "I took my money and employed 200 people in my community. I had a payroll of $1 million a month at times."

Hammer has been out of the limelight for most of the past decade but has tried to bounce back from bankruptcy with new album releases, a career as an ordained preacher, and a gig as a TV show host. He also created a stir last year over a reference to a line by Jay-Z in the song So Appalled that goes, "I lost 30 mil' so I spent another 30, 'cause unlike Hammer, 30 million can't hurt me."

Most recently, Hammer made news for attempting to create a new search engine called WireDoo that's intended to compete with Google and others. The concept is still in the start-up phase.

Hammer isn't the first, nor will he be the last, celebrity who's landed in hot water with the IRS. Less than a week earlier, the agency filed a tax lien against Christie Brinkley for $531,000 allegedly owed in back taxes. The former supermodel has vowed to repay the lien.

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There are upsides and downsides to attending accounting conferences. One upside is the opportunity to immerse yourself in education and learn about the latest trends and tools that can help you in your profession. Another benefit is the chance to fulfil your requirement for annual CPE credits, and yet another is to interact with peers and find out how others in your profession do their jobs and relate to their clients. There are downsides as well.
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Gail Perry, CPA
Editor-in-Chief, AccountingWEB
editor@accountingweb.com


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