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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
charles masini
October 11, 2013 at 1:01 am

Failure to file is a misdemeanor, fraudulent filing a felony. I was in federal prison with both.

Your Mom
October 09, 2013 at 9:51 am

30 thousand, not 30 million imbeciles!!! Who said journalism is dead?? LOL

phucku
September 18, 2013 at 10:11 pm

nice to see u jagazzes reporting tony montana for 31 million dollars in back taxes...................

when reporting $31,706.04 ???????????????

that's about $29,968,293.96...........SHORT OF

30 million.

but it's nice to get you web hits.

u phukin jagazzesssss

brian
September 12, 2013 at 3:56 pm

you dont go to jail for not paying your taxes idiots..you go to jail for lying and committing fraud to hide the taxes you owe

Bawse
September 12, 2013 at 2:26 pm

fergie is the female singer of the black-eyed peas. And she's white. Don't try to make this a race issue. He paid the monies owed. Why would you want him to do jail time?

mike friedman
September 11, 2013 at 6:10 am

hey he owed he paid case closed

jimmy ragland
September 10, 2013 at 8:45 pm

Why is it that BLACK people who owe taxes seem to go to jail for the same type of tax problems?(wesley snipes, jim thorpe,the female singer from the Black-Eyed Peas)

Jo
September 09, 2013 at 1:50 pm

The headline said it was 30 million. The article says 30k. 30 mil is not a simple accounting error.

DrWho
September 09, 2013 at 1:48 pm

I'm calling shenanigans!

Singer Lauren Hill owed 750k in back taxes and paid them off but STILL got jail time. The Judges said rather she paid what she owed or not she STILL broke the law by not paying in the first place thus she got 6 months in jail. I guess it's just another case of the good ole US of A double standard .......

michael
September 09, 2013 at 1:02 pm

I think this is really a non issue.. when you have people like Pacino who earn millions upon millions upon milions a year.. a 30k tax mistake is nothing to be worried about.. a simple accounting error could have caused it to be over looked......it happens all the time to people that rich.. usually with no real backlash.. only because he is famous does this seem like a big deal......he found out about the error, paid it.. done deal...

republican or democrat.. no big deal...

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