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Celebrity tax evaders

Posted September. 07, 2011 07:44,   


Americans fear the Internal Revenue Service most, not the FBI or prosecutors. It was the IRS that forced New York Gov. Eliot Spitzer, known as “Mr. Clean,” to resign because of a sex scandal in 2008. Tax officials tracked suspicious transactions at financial institutions and caught him. Spitzer was found to have withdrawn cash to pay for sex. The IRS also froze North Korea`s bank accounts in Macau’s Banco Delta Asia after detecting illegal money transfers.

Hollywood stars are also under the IRS radar. Actor Wesley Snipes, famous for starring in the “Blade” trilogy, will not be seen on a movie screen for a while. He is serving a three-year prison term handed down by a Florida court for failing to pay tax on income of 380 million U.S. dollars from 1999 to 2001. The IRS ordered actor Nicolas Cage to pay back taxes and fines for using his film studio to write off his personal expenses. What a coincidence that these two tax evaders who are Hollywood stars have ethnic Korean wives.

The National Tax Service of Korea has levied heavy penalties on Korean comedian Kang Ho-dong and actress Kim Ah-joong for tax evasion. Kang must pay hundreds of thousands of dollars and Kim 600 million won (559,440 dollars). Given the size of their penalties, their real incomes are alleged to be huge. Their management agencies claim that they did not intend to evade taxes but both said they will pay the fines. The two cases are said to exemplify a tax trick: “If you`re not caught, it’s tax savings, but if you`re caught, it’s tax evasion.”

Given the nature of “Me Inc.” celebrities, it is hard to set a limit on expenses. Stars, however, live on popularity and are public figures who can greatly influence youths. If celebrities who are paid more than 10 million won (9,320 dollars) per show do not pay their share of taxes, fans will be frustrated. Beyond paying their taxes, they might want to pay more attention to their neighbors in need. Bono of the pop music group U2 has been nominated for the Nobel Peace Prize three times for his contributions to combating poverty and illness in Africa.

Editorial Writer Chung Sung-hee (shchung@donga.com)