IRS, Nicolas Cage tangle over personal expenses

Actor Nicolas Cage is the latest celebrity to be caught up in a dispute with the IRS.

The IRS contends that Cage, the star of "National Treasure," wrongly wrote off $3.3 million in personal expenses, reports Forbes.com. The expenses included limos, meals, travel, gifts, and his Gulfstream turbojet.

Fellow actor Wesley Snipes also tangled with the IRS, which accused him of dodging his tax obligations from 1999 to 2004. Snipes was recently found guilty on three misdemeanor charges for failing to file income tax returns.

Forbes, citing U.S. Tax Court documents filed by Cage, reported that the star is disputing a personal tax bill for $814,000 in taxes and penalties from 2002 to 2004. He also disputes that his company, Saturn Productions of Los Angeles, owes $988,000. The IRS denied Saturn the deductions for the disputed expenses and then turned around and taxed Cage individually on the perks as salary and "constructive dividends."

Forbes reported that Samuel J. Levin, Cage's business manager, said the expenses were proper as "customary in the entertainment industry" and were partly based on the actor's "security needs."

Voice of the Editor

What would you do if one of your clients won the lottery? We asked several accountants to weigh in with their advice for the lucky Powerball winner, and the tips we received are useful for anyone who receives a windfall, whether it's a lottery win, an inheritance, a big bonus on the job, or a killing in the stock market.
ADVERTISEMENT

This Week on AccountingWEB

CPAs Mira Finé, Scott Hitchcock, Rob Keasal, Kathy Scorcio, and Ken Travis offer ten pieces of financial advice for the newest Powerball winner.
Hang Bower of BDO USA and Dan Black of Ernst & Young share their perspectives on why their firms made the Best Places to Work for Recent Grads 2013 list.
Herbein + Company, Inc. firm members talked with AccountingWEB about their year-round employee wellness program.
Bill Walter of Gross, Mendelsohn & Associates and Harold Gaar of TravisWolff LLP weigh in on mobile technology use while employees are at work.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT