The federal tax evasion trial of Richard Hatch, the first “Survivor” winner, is underway. You may recall that the reality star was charged with failing to report his million-dollar winnings to the Internal Revenue Service (IRS), as well as other related charges.
Initially, Richard agreed with IRS and then withdrew his plea, claiming that CBS had agreed to pay the tax due. Confused?
Well, it gets better. His newest “defense” in the case is that Hatch struck a deal with the producers of “Survivor” wherein they would agree to pay the taxes due on his winnings if he didn’t reveal allegations of cheating on the show. Hmm. Isn’t that extortion? Granted, I’m a tax attorney and not a criminal attorney, but I’ve always thought that withholding information about wrongdoing in exchange for cash was extortion. But, for kicks, let’s say it wasn’t. Let’s say that CBS really agreed to make the payment – which should be about $300,000. How do we classify that money? A gift? Definitely not. No donative intent. How about income?
We may never know. So far, U.S. District Judge Ernest Torres has failed to rule on whether Hatch can testify as to the deal. Hatch’s lawyer advised the Judge of his plans to present this information at trial on Friday, and it is not yet clear whether that will happen.
The twist has all of the elements of a classic “Survivor” moment – cheating, deceit, extortion and, of course, it was completely unexpected. So much so that, despite Mark Burnett’s prior turn on the witness stand, and months and months of trial preparation, this novel argument as to motivation has not surfaced until now.
If Hatch somehow manages to win the jury over on that argument, he still has other charges pending. Hatch is also accused of failing to pay taxes on hundreds of thousands of dollars of other income, such as appearances relating to his “Survivor” win, and improperly spending money donated to a charity that he founded.
But, of course, there’s an argument there, too. Hatch’s lawyer has argued that Hatch is the “world’s worst bookkeeper” and that the failure to pay taxes on that money is merely an oversight. Right. If you’ve ever been at the end of an IRS investigation, you know that the IRS gives you one, two, heck, in some cases, several opportunities to “settle up” any debts or omitted payments. I suspect that Hatch was notified on more than one occasion that he had not properly reported these payments. And if, as it appears his attorney is arguing, the failure to report income was simply an omission, why not pay up and move on? I’m a little confused as to why those arguments are even being made at the trial level.
All of that said, Hatch better hope that a jury is more sympathetic than me. If he is convicted, he could face up to 75 years in prison and millions of dollars in fines.
That hurts worse than having to walk around naked on the island, no?
