Ask The Taxgirl: Sinbad & Garnishment

Taxpayer asks:

Hi taxgirl, I know this is a weird question but could the IRS take Sinbad’s money from “Celebrity Apprentice” if he had won? He didn’t win because he got fired. But I wanted to know. Thank you.

Taxgirl says:

I had to look this one up because I didn’t even know that Sinbad was on “Celebrity Apprentice” this season (or, more properly, I didn’t know that “Celebrity Apprentice” was airing this season). But I am aware of Sinbad’s tax woes… The IRS has filed a lien against Sinbad for $8.15 million to cover tax years as far back as 1998.

The IRS has a couple of ways to recover taxes owed to them. You zeroed in on one of them: wage garnishment. The IRS can arrange to take part of your wages to satisfy a debt. The amount is determined by a formula and is dependent on other available assets.

It’s my understanding that the winner of “Celebrity Apprentice” doesn’t win money for themselves but for the charity of their choice. My gut is that Trump arranges to pay the charity directly so as to maximize any potential charitable donation – but I don’t know that for sure. If that’s the case, the IRS couldn’t attach that prize since Sinbad never had control of the cash.

But according to one of my pop culture-savvy friends, each star (and I use the term loosely in many cases) who appears on “Celebrity Apprentice” receives an appearance fee for being on the show. Apparently, the number increases the longer they stay. So, Sinbad’s appearance fee is likely to be pretty small since he didn’t make it very far… But even so, the IRS could make arrangements to seize part of it.

Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
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