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."

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