Nicolas Cage: Poster boy for delinquent taxes
by AccountingWEB on
Just when you thought he’d learned his lesson, Nicolas Cage is wrestling with more tax issues. Since late last year he had become the poster boy for celebrities who don’t pay their fair share, making headlines time after time.
He complained of being perceived as a deadbeat, telling People magazine, "Over the course of my career I have paid at least $70 million in taxes. Unfortunately, due to a recent legal situation, another approximate $14 million is owed to the [Internal Revenue Service]. However, I am under new business management and am happy to say that I am current for 2009. All taxes will be paid, including any to-be-determined state taxes."
That may have been true then. Now, he has a new tax nemesis…California Governor Arnold Schwarzenegger. In April, the state of California filed a lien against Cage and his wife, Alice, for more $3.8 million in unpaid taxes. Here’s a recap of the tax melodrama that has become Cage’s life:
In early 2008, the actor was accused by the IRS of inappropriately writing off $3.3 million in personal expenses for income relating to 2002 through 2004. Forbes magazine said the expenses included such luxuries as limos, travel, a Gulfstream turbojet, lavish meals, and gifts.
After disallowing those expenses, the IRS sent Cage a personal tax bill for $814,000 and another one to his company, Saturn Productions, for $988,000. At that time, Cage’s business manager, Samuel J. Levin, told Forbes that the disputed amounts were “customary in the entertainment industry,” and that some related to the actor’s security and appearance (hairstylists, manicurists, personal trainers).
Cage proclaimed a great victory later in 2008 when the tax bill, which had totaled more than $1.8 million, was reduced by approximately one-third, or $666,000. Part of the reduction was because Cage’s representatives correctly pointed out that some of the disallowed expenses were counted twice by IRS authorities.
Less than a year later in mid 2009, Cage and Levin might’ve realized that they celebrated too soon. Once the IRS got the actor in its crosshairs, the IRS evidently decided to take a closer look at his other tax returns.
On July 14, 2009, they filed a lien in the Orleans District Court of Louisiana for a whopping $6,257,005. This time, he wasn’t able to get the taxman off his back so easily, and scrambled to sell his home in California for a reduced asking price of $17.5 million. It originally had been on the market for $35 million.
In case you worry that Mr. and Mrs. Cage will be living on the streets, don’t fret. They also own homes in New York, the United Kingdom, and the Bahamas.
Next came tax year 2008, and an even bigger tax lien – this time for $6.7 million. Remember business manager Samuel J. Levin, who helped Cage beat down the IRS in the first tax lien? By the third round, Cage was blaming Levin for bad investment advice that, he said, put him and his family in financial jeopardy. Cage and Levin currently are embroiled in a $20 million lawsuit filed by the actor.
Jump ahead to April 14, 2010. That’s when the state of California filed a tax lien against the Cages in the Los Angeles County Recorder of Deeds for $3,811,952.
Cage’s publicist told the Detroit News, "All entities are aware that this is in process and, from my understanding, all the parties are satisfied that everything will be paid back. Nicolas is doing everything that he needs to do to get these monies owed paid back."
Will there be a Round Five to report? Let’s hope not. .
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1 week 4 days ago by mucar1990