Oh, what would Biggie think? His former protege, Lil’ Kim (real name: Kimberly Denise Jones), has been trying to reinvent herself following a stint in federal prison in 2005. Kim was found guilty of conspiracy and perjury for lying to a grand jury about a 2001 shooting outside the Hot 97 studios in Manhattan and served less than a year in a Philadelphia prison.
Kim claimed to have written over 200 songs while in prison. Once released, she started working on other projects, including more acting gigs and now, a turn on the very popular Dancing with the Stars. Paired with the talented (and not so bad on the eye) Derek Hough, she won rave reviews from the judges last week. She hopes to cha cha her way to the title, mirror ball trophy and perhaps a little extra cash… As it turns out, the rapper owed nearly $1 million in state and federal tax liens in California, New York and New Jersey. The liens were a result of issues with Kim’s tax filings in 2004.
Since that time, Kim has been working to pay down the debt, according to her spokesperson, but still owes a considerable amount. Maybe this will be the year she “Get Money.”
On the day that the new season of “Dancing With the Stars” debuts, the former DWTS champ did some fancy footwork of his own in his first day of court. Helio Castroneves and his sister Katiucia Castroneves, together with their lawyer, Alan Miller, faced prosecutors on the first day of a federal tax trial alleging conspiracy and tax evasion charges. If convicted, the three could be sentenced to more than six years in federal prison.
The IRS says that Castroneves, his sister and lawyer, conspired to hide millions of dollars in licensing fees from Penske Racing to avoid taxation. Castroneves claims, however, that he didn’t have access to the fees from Penske and wasn’t planning on avoid avoiding taxation once he controlled the funds. The key is whether the IRS can prove that Castroneves did not have control of the funds.
Under the doctrine of “constructive receipt” a taxpayer is responsible for reporting income when it’s made available, and not simply when the taxpayer chooses to take the money. The government alleges that Castroneves has been in constructive receipt of $5 million that he has not reported.
When Castroneves negotiated his $6 million licensing deal with Penske Racing, he received $1 million; the $5 million was to be paid to a Panamanian corporation called Seven Promotions. However, Castroneves’ lawyer reportedly asked that Penske hold the funds; Penske’s general counsel confirmed this during trial today. Penske retained the money until January 2003 when the funds were finally delivered to a firm in the Netherlands.
Assistant US Attorney Matt Axelrod argued that the money was taxable once the funds were available, saying, “The individual’s wishes do not control. A taxpayer may not deliberately turn his back upon income and thereby select the year for which he will report it.”
Castroneves’ attorney, however, claims that the money was part of a “deferred royalty agreement” and only taxable when paid. The money was reportedly to be paid out in 2009.
The trial resumes tomorrow and is expected to last a month.
It’s time for our annual review! Here are my picks for the top stories on taxgirl.com for the year:
10, Dancing With The Stars champ and race car driver Helio Castroneves is indicted on federal tax evasion charges. In a related story, my mother is stricken with grief and may never samba again (okay, I’m not sure that she sambaed before but I’m pretty sure that this will end any chance).
9, Prop 8 in California passes and prompts the promise of tax boycotts by the gay and lesbian community.
8, taxgirl endorsed Obama for President. I was both roundly cheered and jeered for my picks but stand behind my choice. One of my most controversial and commented posts of the year.
7, Tax evaders hit the slopes. A massive tax fraud investigation in Germany, the UK, the US and other countries points the finger at the tiny Alpine principality of Liechtenstein. I am elated to finally have a reason to prove that I can spell Liechtenstein.
6, After Congress says no, President Bush says yes and earmarks taxpayer dollars to save the Big 3 automakers. As a result, Fiat misses its chance to hit it big in the US.
5, Wesley Snipes is acquitted of tax fraud. Remarkably, the world did not end, though we will now be subjected to more of his movies.
4, Congress commits US taxpayers to a remarkable bailout package. Treasury Secretary Paulson is now more powerful than Oprah.
3, The “biggest tax fraud ever” tax trial finally reaches an end. Out of the original 19 defendants involved in the spectacle that was the KPMG trial, only 3 were eventually convicted.
2, Rebates, rebates and rebates. I probably posted the most – and received the most comments – about this year’s rebate checks. Taxpayers were confused about the amount of the check, set-offs, when checks might arrive and more. An overwhelming majority of Americans admitting to being as cynical about the chances of the checks stimulating the economy as they are about Paula Abdul “just being tired.”
1, taxgirl gets a nod by the editors of the American Bar Association in the ABA Journal Blawg 100 for 2008. In case you missed it before, voting by readers for the best of the blawgs runs through January 2 – just click to vote. And no, this tidbit never gets old (not for me, anyway)!
So those are my picks for the year. What did you like? What did you hate? And what did I miss?
Helio Castroneves will face the music – again – in March. Only, he won’t be able to tango his way out of this one quite so easily.
The Indy 500 race car driver and winner of the 5th season of Dancing with the Stars (along with fan favorite Julianne Hough) found out this week that his federal court trial will begin on March 2. Castroneves is facing one count of tax conspiracy and six counts of tax evasion with respect to income that he allegedly hid in offshore accounts in order to escape taxation.
The two-time Indy 500 winner entered a not guilty plea last month. If convicted, Castroneves faces stiff penalties and jail time.
