2013 seems to be the year for tax scandals. Companies like Amazon, Google and Starbucks were “exposed” of avoiding corporation tax – legally using loopholes in international laws by basing their companies in countries such as Luxemburg and Switzerland, which have either very low or next to zero tax rates.
It has also been a theme in this year’s sporting world as French football club AS Monaco have so far avoided having to pay the same tax rates as the rest of the French football league for their new mega-star players.
It has also been an eventful time for the Hip-Hop industry and paying taxes. Or lack thereof. Yesterday (24th June 2013) saw Joseph Cartagena a.k.a Fat Joe sentenced to 4 months in federal prison and also fined $15,000 for failure to file tax returns on more than $3.3 million in income. Joey Crack isn’t the only one in the Hip-Hop industry to have their collar felt by the IRS.
We are going to look back at 10 Hip-Hop artists who have had their run-ins with the IRS.
10. SNOOP DOGG
The Doggfather was in trouble with the IRS last month. He had originally failed to pay taxes for the years of 2009 (owing $101,952.44) and 2011 (owing $444,317.85).
He has since settled this tax lien by paying up $546,000.
This wasn’t his first run-in with the IRS. In 2008, Snoop had originally failed to pay $476,000 in back taxes but also settled that bill once it was brought to his attention.
Our message to Snoop: Lay off the weed and stay on top of these things!
9. METHOD MAN
Wu-Tang Clan member Method Man (real name Clifford Smith) had the IRS on his case in 2009 for failing to pay up almost $33,000 in back taxes ($32,799 to be exact). This is punishable by up to four years in prison if convicted. He also faced a misdemeanour’s charge of failure to pay tax.
Incredibly, Tical said he was too high to pay his taxes:
“Because I got high, I forgot to pay. It was stupid. I’m an idiot for that.”
– Method Man – NYDailyNews.com Interview – 27th March, 2009
“You know, when you don’t file your taxes, that’s what happens, so that’s the lesson I learned. The government is not playing, Uncle Sam pimp slapped me and it’s a lesson learned and I’m gonna take this and learn from it.”
– Method Man – Live In The Den Interview – 2009
Once he turned himself in and pleaded guilty to attempted tax-evasion, he was given a conditional discharge after paying $106,000 in restitution.
Again: Lay off the weed and stay on top of your finances!
This particular Hip-Hop artist has a long affiliation with the law.
Back in 2009, Dark Man X’s then-latest run-in with the law was down to the fact that he owed the U.S. government and the state of New York $1.5m in taxes dating back to 2002. It was a very messy affair to say the least.
The IRS filed a $442,869 lien against DMX (Earl Simmons) and his wife on Jan. 2 2009 in New York City.
Then they filed a $663,554 lien against him on Sept. 10, 2007, in Arizona. According to the lien, he owed income taxes from 2002, 2003 and 2005.
For the sake of simplicity, the remaining figures were: $8,343, $44,357 $370,460.
7. LIL WAYNE
Weezy has a rather interesting history with the IRS to say the least. He once owed the IRS a total of $5.6 million, which broke down into $3,351,078 owed for 2008 and $2,258,956 for 2009. In 2010, he had liens against him for more than $1 million for the tax years 2004, 2005 and 2007.
Lil Wayne (real name Dwayne Michael Carter, Jr.) needed to sort it out and quick. So he sold his insanely lavish Miami Beach home. The mansion boasts 15,101 square feet; three floors of glass, steel and marble; and a three-level guest house. Weezy’s master bedroom could only be accessed by a glass and steel elevator!
With the threat of the IRS seizing his proprety, Wayne subsequently managed to sell the property. The Miami-Dade County then showed reports that he paid off $7.72m in back taxes in December last year.
6. YOUNG BUCK
The former G-Unit rapper filed for bankruptcy not once, but twice. The first instance was in August 2010 after Uncle Sam raided his house for assets in which they planned to auction off to raise funds for the tax-payer. Buck owed the IRS around $300,000. He filed for Chapter 13 bankruptcy protection. His lawyer was hoping to sue former G-Unit affiliate/boss 50 Cent for a sum of $5m over a record contract dispute.
However, this was dropped after the IRS successfully auctioned off his assets which included studio recording equipment, watches, 50 Cent plaques and pictures of Snoop Dogg and 2Pac. Buck claimed that the auctioning of his recording equipment was “directly tied to” his “ability to generate income in order to reorganize the estate.” Items from the raid can be viewed here.
Young Buck (who’s real name is David Darnell) then filed for bankruptcy for the second time after dropping the potential suit against 50 Cent.
Buck has since been jailed for gun-charges following said-raid by the IRS after they found firearms at his property during the raid.
“I have a new team in place, but I am also paying full attention now. Nothing like this will ever happen again. This is a huge wake-up call for all entertainers to stay on top of your own trusted employees and team members, and replace anyone that was put in place by your record label if the situation you have goes sour. This IRS situation came about because I trusted accountants, lawyers and managers to handle my business for me while I focused on making music. From now on, I am going to stay on top of my own business.”
– Young Buck – MTV Interview – 4th August, 2010
Buck also once made an interesting claim a year ago:
— The Real Young Buck (@youngbuck) July 27, 2012
Maybe these problems changed his outlook on money? Who knows.
5. SCOTT STORCH
The one-time Roots member, Dr. Dre affiliate and super-producer owed the IRS over $500,000 in property taxes. $511,839.16 to be exact.
He owed $294,492.50 for ’06, and $217,346.66 for ’07. This was the least of his worries.
Storch famously became bankrupt after his lavish spending and then subsequently had missed child support payments. Not only that, up until 2012, Scott Storch allegedly owed debt to rapper Birdman for $14.5 million and $58,077.37 to 13 creditors in 7 different states.
“I think I’m finally falling in love with music again. I lost the passion for a while [during] all the public personal issues I went through. As time goes by, the clarity that I’m gaining every day, I feel like my music is getting better and more vivid.”
– Scott Storch – AllHipHop.com interview – 25th April 2013
Even though he has been recently working with 2 Chainz, the days of producing “Lean Back” for Fat Joe and “Still D.R.E” for Dr. Dre seem far away now for Mr. Storch.
4. BEANIE SIGEL
Last year, former Jay-Z associate Beanie Sigel was sentenced to two years in prison for failure to file federal income-tax returns for 2003-2005. Sigel (real name Dwight Grant) earned over $1 million in net income from 2003 through 2005 and owed the IRS $348,077 in taxes during that time period. Prosecutors say Sigel owed the IRS $728,536 for tax years of 1999-2005.
The state of Philadelphia was pushing for the maximum sentence of three years in jail. However, Beanie Sigel’s attorney managed to get a reduced two year sentence for his client. Sigel pleaded guilty to the charges. He accepted responsibility but also claimed that his career had been affected during his time served in jail for gun charges back in 2004-05 and that his money was mismanaged by family members.
Regarded by some as the best to ever do it, Queens rapper Nas has a messy history with the IRS. For the the years of 2006, ’07, ’09 & ’10, he owes the State of Georgia’s Department of Revenue $1,083,435. In 2012, it was also revealed that Nasty Nas also owes the IRS another whopping $6m in back taxes.
“I don’t have any regrets. The way we live is no regrets. Everything is a learning experience and your mistakes, when you go back to look at them, are just moments of being human. Those are my reference points. So I go back to those points. And I love those points when I didn’t do well because that meant I was just a human.”
– Nas – Huck Magazine Interview
Nas is another example of a link between two entries in this article. The IRS made the point of taking Nas’ earnings from his concerts with Lauryn Hill, directly from concert promoter Live Nation’s pockets.
Even though “Life Is Good” was a huge success, 2012 wasn’t a kind year for Esco. It was also revealed he owed Uncle Sam property tax to the tune of $339,005.49. One must assume he will be working hard to pay those debts off for the foreseeable future.
2. LAURYN HILL
Last month we saw the Fugees singer/rapper sentenced to three months in prison for tax evasion. She will also have to serve three months of house-arrest.
Lauryn Hill failed to pay taxes on about $1.8m of earnings between 2005-07. She claimed that she intended to pay the taxes but due to her retirement from the music industry to raise her children, she could no longer do so.
“I am a child of former slaves who had a system imposed on them, I had an economic system imposed on me.”
– Lauryn Hill – 6th May 2013
1. FAT JOE
As stated before, Fat Joe has just been sentenced to four months in federal prison and fined $15,000 for failure to file tax returns on more than $3.3 million in income. In December 2012 he pleaded guilty to the charges of failing to file his tax returns from 2007 to 2010 but after a plea from his lawyers it got reduced to 2008-2010.
He tried to redeem himself by donating computers to local schools and also paying $718,000 in back taxes prior to his sentencing. Even though the judge somewhat commended him for that, he was still sent to the clink.
“There was a lot going on in the years that I didn’t file my taxes, but it was my responsibility.”
– Fat Joe – 24th June, 2013
There is no doubt that the Hip-Hop genre of the music industry seems to have a chronic problem with dealing with taxes. As you can see, this is a top 10 of prominent artists who have had run-ins with Uncle Sam. There are a lot more Hip-Hop artists out there which haven’t even made this list.
With all the bravado of owning whips, jewellery, properties, yachts, record labels and even their own companies and ventures, Hip-Hop artists need to get their own house in-order before they can begin to start boasting about having a flashy lifestyle. As Lauryn Hill currently serves her time and Fat Joe looks forward to prison time for failing to file his tax returns, Hip-Hop needs to sit up and learn from these mistakes that others are making or a lot more artists are going to end up bankrupt or end up in jail.