This past Thursday, a tax court judge ordered actor Wesley Snipes to pay back taxes in spite of his considerable effort to persuade the Internal Revenue Service to believe he does not have the money.
Initially, the IRS made an attempt to collect $23.5 million from Snipes, and his almost-immediate response was to propose an offer in compromise. The latter is simply a term that refers to an action that would have allowed him to satisfy his tax debt, as well as have the tax lien removed from his home for a lesser amount than the IRS had originally requested. The offer in compromise was for $850,000. However, it was rejected by the Internal Revenue Service, at which point Snipes filed a petition to have the decision overturned.
On November 1st, tax court Judge Kathleen Kerrigan told Snipes that the court remained unconvinced that he does not have the money and assets to offer more than $850,000, and that he was essentially unable to prove financial hardship. A settlement officer reportedly reviewed the actor’s assets and real estate holdings, determining that a more appropriate collection figure would be approximately $17.5 million and that this was not an unreasonable amount.
Even though the courts offered a much lower settlement amount than the 23.5 million they initially tried to collect, Snipes continued to fight back. He claimed that assets were disposed of and loans were taken out by his financial adviser without his knowledge and offered an affidavit in which the adviser reportedly admitted his misconduct. Ultimately, however, Snipes was unable to provide any documentation from a tax attorney or any other source to prove that his assets were diverted into investments or other financial endeavors that ultimately failed.
Snipes, now 56, was convicted on tax charges in the past and served a three-year sentence in federal prison. He was released in 2013, and shortly thereafter the IRS sought to collect monies owed for tax years 2001 to 2006. This conflict ultimately ended with Thursday’s ruling, with the actor’s liability being reduced even more, to about 9.5 million. However, Snipes is still maintaining that he is only willing to pay his initial offer of $850,000. He did not make himself available for comment concerning the judge’s ruling.
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