This week, actor Robert De Niro was hit with a IRS tax lien from the IRS on his Manhattan condo for owing $6.4 million in unpaid taxes. De Niro took action right away to pay the debt, and his spokesperson said that the taxes were unpaid because he had not received the notices.
This isn’t the first time that a celebrity has run into trouble — or a misunderstanding — with the IRS. In fact, there are at least three lessons that celebrities have had the opportunity to teach us about tax liens, in particular.
IRS Tax Liens
1. Make sure the IRS has your current address.
De Niro claims that he was not aware of the unpaid taxes because the delinquency notices were sent to an old address. To prevent this from happening, it’s important to file a Form 8822, Change of Address with the IRS if you move.
2. They can be wrong.
In 2012, Dionne Warwick was able to prove that a $2.2 million tax lien filed against her by the IRS had to be revoked because it was the result of an accounting error. Though the tax liens issued by the IRS are usually valid, it’s still wise to have it checked out with a tax attorney like Dion Warwick did. If it is wrong, it can be released.
3. It’s important to act quickly.
Recently, comedian Chris Tucker ran into trouble with the IRS and had a $14 million lien filed against him. Tucker was able to reach a settlement with the IRS but not before penalties and interest had been added to his bill, making what he owed even higher.
There is usually a limited time that the IRS gives taxpayers to respond — such as 30 or 90 days — and if you do not act within the allotted time it may mean giving up on a procedural advantage and paying fines or interest.
To learn more about tax liens, visit our tax law website.