For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
Nov. 10 — Actor Wesley Snipes, who served more than two years in prison for failure to file tax returns, is fighting a nearly $17.5 million collection determination for tax years 2001-06, asking the U.S. Tax Court to let him enter the IRS's Fresh Start program.
According to the Nov. 5 petition, the “issuance of the notices of determination flows from an abuse of discretion,” and the Internal Revenue Service based its denial of an $842,000 offer in compromise from Snipes, as well as subsequent “unreasonable collection potential determinations,” on long-lost assets.
The IRS sent Snipes a notice of final tax lien in August 2013, determining a total liability of nearly $24 million for 1999 to 2006.
Snipes, who was found guilty in 2008 on three misdemeanor counts of failing to file federal income tax returns, contested the liability. In February, the IRS responded to Snipes with a Form 14561, Income and Expense/Asset Equity Calculation Table, that determined a reasonable collection potential of approximately $6.4 million.
In March, on the day of a scheduled conference call between Snipes' representation and the IRS, the Service sent a revised Form 14561, calculating a reasonable collection potential at more than $18 million.
Snipes disputed the amount, and after an IRS audit, a new notice of determination was sent to Snipes in October reflecting a collection amount of about $17.5 million.
In denying the offer in compromise, the IRS cited Snipes' involvement in the upcoming film “Chiraq,” as well as NBC's “The Player.”
According to Snipes' petition, “Petitioner is trying to put his life back together after being led astray by unscrupulous advisors, and he desperately needs the fresh start which Respondent's ‘Fresh Start Initiative' offers.”
Snipes also argued that the reasonable collection amount calculated by the IRS was “inaccurate” and “arbitrary.”
“No matter how well intended, arbitrary determinations of ‘reasonable collection potential' known to be inaccurate constitute per se abuses of discretion,” the petition said.
Snipes requested the trial be held in Atlanta.
David D. Aughtry of Chamberlain, Hrdlicka, White, Williams & Aughtry represents Snipes.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)