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Don’t Ignore Uncle Sam….

Posted under Accounting by Sharon Taylor, no comments 07 Dec
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DMX pleaded guilty to a single count of tax fraud Thursday, five months after the rapper was arrested on charges that he withheld $1.7 million in taxes over a five-year period.
Related
DMX Arrested for Tax Fraud, Allegedly Withheld $1.7 Million From IRS

“While raking in millions from his songs, including his ‘X Gon’ Give it to Ya,’ DMX didn’t give any of it to the IRS,” U.S. attorney says

In July, the rapper was charged with 14 counts of tax fraud and pleaded not guilty at the time. However, DMX, born Earl Simmons, pleaded guilty at a Manhattan court Thursday. The rapper faces up to five years in prison at sentencing on March 29th, the Associated Press reports.

In court, DMX blamed “people in charge of me” at the time for the tax fraud, which occurred from 2010 to 2015, a span of five years where the rapper didn’t file any tax returns. “I’m responsible… I failed to file taxes,” DMX admitted in court Thursday.

In another instance of tax evasion, prosecutors accused the rapper of refusing to tape an episode of Celebrity Couples Therapy “until a properly issued check he was issued was reissued without withholding any taxes.” They also claimed DMX lived a “cash lifestyle” to obscure earnings and deposited money into his managers’ bank accounts to stash his own income.

“Today, Earl Simmons admitted to systematically cheating on his taxes. By insisting to be paid in cash whenever possible and having royalty payments diverted to the accounts of financial surrogates, Simmons concealed hundreds of thousands of dollars of income from the IRS,” Joon H. Kim, the acting United States attorney for the Southern District of New York, said in a statement. “Simmons made a choice between ‘Right or Wrong,’ and did the right thing, admitting his guilt, and agreeing to pay his tax liabilities. No matter who you are or whatever fame you may have achieved, the law applies equally to all, and no one is exempt from the shared obligation to pay our taxes.”

As part of the guilty plea, DMX agreed to repay the IRS through royalties and future earnings.

DMX’s lawyer Murray Richman told ABC News, “He’s of the opinion that he’s guilty because he didn’t properly supervise his own life. He gave the responsibility of paying his taxes to others but he knows it was his responsibility. He’s owning up to it at this particular point.”

Uncle Sam wants his money, and as much as we hate giving it to him, it is important to not only pay your taxes but to pay the right amount. in an edition of On Wall Street magazine some IRS statistics that illustrate why it is a good idea to keep up with your taxes were published:
IRS Criminal Investigations for Fiscal Year 2007

Investigations Initiated: 3,204
Prosecution Recommendations: 2,107
Information/Indictments: 1,818
Total Convictions: 1,620
Total Sentenced: 1,592
Percentage Sent to Prison: 80.4%
Average Months to Serve: 41

So, there you have it. If your taxes are simple, just make sure you pay them. If you have more complicated tax issues or own a business, it can pay to hire someone to help make sure you’re doing them right. It doesn’t pay to try and cheat the system.

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