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Pacino promptly pays tax lien

By Kay Bell · Bankrate.com
Tuesday, August 20, 2013
Posted: 3 pm ET

Al Pacino is famous for playing movie criminals such as Michael Corleone in "The Godfather" series and Tony Montana in "Scarface." But in real life, the Oscar winner is quick to get back in the good graces of tax enforcers.

After being slapped this spring with a $31,706.04 tax lien by the state of California, reportedly for unpaid Golden State taxes from 2009 and 2011, Pacino promptly paid off the tax debt.

California officially released the lien July 31, according to the celebrity website TMZ.

The state tax issue was not Pacino's first run-in with tax collectors.

In 2011, the Internal Revenue Service filed a lien against Pacino for $188,283.50 in connection with unpaid taxes in 2008 and 2009. In this case, the tax issues were related to a Ponzi scheme in which several Hollywood stars were caught.

Tax lien entanglements

Even if you have good reasons for not paying a tax bill, the bottom line is that the nonpayment is likely to lead to a lien.

The result is more than just embarrassment from having your tax situation revealed in public records.

The lien will show up on your credit report, making it at best difficult and at worst impossible for you to get a loan for a car or house.

Many employers also check credit reports when making hiring decisions.

And your property is tied up until the tax agency releases its claim.

Avoiding tax liens

The best way to avoid this embarrassing and costly situation is to pay the tax you owe on time.

It that's not possible, contact the tax office. This lets the agency know you're not avoiding the bill and in many cases, the tax collector will work with you. IRS options include installment payment plans and offers in compromise that allow you to settle your tax bill for less than is due.

Also remember, the IRS does make mistakes. If it files a lien by mistake, you need to file an administrative claim with the IRS to have the lien removed.

Regardless of whether the lien was in error or you neglected to pay your tax bill, once the debt is paid off and the IRS releases the lien, get a copy of that official action. Then send it to all the credit bureaus so your files can be updated and you can say "goodbye" to that unwelcome little tax friend.

***

Want the latest news on taxes, tax reform prospects, filing deadlines, political fights, Internal Revenue Service alerts and tax-saving tips? Subscribe to Bankrate's free Weekly Tax Tip newsletter.

You also can follow me on Twitter @taxtweet.

Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and a co-author of the e-book "Future Millionaires' Guidebook."

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35 Comments
Joe B.
September 09, 2013 at 11:02 am

CNN had it as $30M as well.

Willy
September 09, 2013 at 9:59 am

@al,

Al Pacino is a huge democrat donor and self-described liberal. He didn't pay his taxes. Does that clear up your confusion?

Your "civilized society" is funded mostly by republicans. They pay taxes and would like to ensure that the money is spent in meaningful ways, instead of "save the children" boondoggles.

al
September 09, 2013 at 1:44 am

@ ronrico,
it's the conservatives that don't want to pay taxes.
the liberals call it the cost of living in a civilized society.

abner
September 09, 2013 at 12:24 am

the pluto-crats @ the irs (state bodies as well) have no problem sitting in their offices and throwing liens at you with NO proof or court orders! I irs agreed with me, I proly didn't owe the taxes, but said I, yes ME, had to show THEM the proper rule to release the lien, and the cheapest atty wants 2 to 3 grand to "help".

Rod C. Venger
September 08, 2013 at 10:28 pm

Hobbies should never involve making money. Those are not hobbies, no matter how much you enjoy it. They are businesses.

John Clark
September 08, 2013 at 9:09 pm

My problem is against the California State tax people. I played the stock market (my hobby), and some years ago, in the middle of a divorce, my filing became more than 3 years late. Eventually, all returns were filed, and taxes plus penalties were paid. What's the problem? The IRS didn't bother me, but the state tax folks had me post a $200,000 "estimate" against stock market profits. Well, Schwab mailed the usual 1099-B showing gross sales (not net profits), because prior to 2011, brokers did not have to show the cost basis. I had no profits, but gross sales based upon zero cost revealed a huge non-existent taxable profit. The three year rule required the tax return to be filed. It stops the refund process. My CPA did not file because the numbers were not yet available. I say he should have filed something, anything. Of course, the accountant is long gone. Any way to get my money back? File a lien against the FTB? Ideas please, preferably from a professional. I've been told to forget it.

ronrico
September 08, 2013 at 7:50 pm

pay your taxes liberal douschbag--

George Hilman
September 08, 2013 at 7:06 pm

A $30K lien is hardly news, or worth comment on. (BTW I'm commenting on the questionableness of making it a news item.)

Brian
September 08, 2013 at 5:28 pm

30 thousand. 30 million. what a difference a few commas makes. And it was Bankrate's story.

Faux News
September 08, 2013 at 2:49 pm

Using $30M to mislead readers, Foxnews? Say it isn't so. Say that you don't make up stories? LOL. Foxnews: News for stupid people. I don't know why I still fall for any news you create.

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