Pay Your Taxes: A Cautionary Tale | WAMU 88.5 - American University Radio

Pay Your Taxes: A Cautionary Tale

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When IRS agents raided the house of rapper Young Buck, they seized all his things: his white leather dining chairs, his watches, his craps table, his tattoo kit. Even his refrigerator. The Nashville artist, who was once part of 50 Cent's G-Unit, owed hundreds of thousands of dollars in back taxes.

His lawyer, Robin Mitchell Joyce, said he thought Young Buck's taxes were being handled by his business manager. They weren't.

I went to another business manager to see what might have gone awry-- Horace Madison, who manages music moguls like Lil Wayne. "This is not a hip hop thing," he points out. "This is a music industry thing."

Musicians, unlike most people, don't get a regular paycheck, with taxes withheld for them. "Most entertainers and musicians receive their money on a gross level, with no taxes taken out."

Big stars can earn more than a million dollars in a couple of months. But they have a lot of expenses — lights, stage, tour bus, entourage.

And after expenses, of course, there's taxes. Every quarter. Madison says that if you made a half a million dollars in 3 months, "You need to make an estimated tax payment of $200,000."

On top of that, if you're an entertainer, what qualifies as a business expense can seem really murky. Your whole lifestyle is not tax deductible.

Madison has tried to deduct watches, arguing that it's a necessary business expense for his client to have a certain look. The CPAs at his company threw it back.

The IRS loaned Young Buck his refrigerator back, along with a few other things. But most of his stuff is still stored in an undisclosed location. His music catalog is up for sale on May 14. Even the rights to the name "Young Buck" might be sold.

Many musicians have been in his situation. After Willie Nelson's home was raided by the IRS 20 years ago, Nelson made an album called "The IRS tapes." He paid back some of the debt that way.

For More: Listen to our playlist of musicians who didn't pay their taxes.

NPR researchers JoElla Straley and Barbie Keiser contributed to this report.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

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