I'm Darrin Mish. For 32 years I've practiced federal tax litigation — routine audits, Tax Court cases, and everything in between. If you're facing an IRS issue, here's what you need to know first.
Singer Dionne Warwick who shot to fame with unforgettable tunes like ‘Heartbreaker’, ‘I’ll Never Fall in Love Again’ and ‘That’s what Friends are For’ has filed for Chapter 7 bankruptcy saying she owes the IRS $10m in back taxes. Warwick, 72 won 5 Grammy Awards in a distinguished singing career that spanned four decades. The East Orange native lives in a 3,200 square foot home and has only $10 left at the end of each month after paying expenses, according to the petition filed in US Bankruptcy Court in New Jersey. Among her expenses are $4,000 for her personal assistant and $16,940 for other monthly expenses while her $20,950 monthly income is derived mainly from performances, royalties, her Screen Actors Guild pension and social security leaving her with a paltry $10 net income over expenses. Click here to watch or read more information on IRS Back Taxes.
Recently Warwick was presented with the key to her native East Orange at the city’s 150th anniversary celebrations when she sang in Red Bank.
According to the bankruptcy petition, Warwick has $25,500 in assets and $10.7 million in liabilities. Her publicist Kevin Sasaki, said in a statement that “due to several consecutive years of negligent and gross financial mismanagement” Warwick realized the “current necessity to file personal bankruptcy.” What started off as a small tax liability in the 1990’s has snowballed into an insurmountable obstacle for the singer today.
Warwick’s assets include two fur coats and two sets of diamonds earrings that have a combined value of $13,000, gowns and everyday clothing worth $5,000 and artwork and paintings worth $5,000. The singer owes both federal and state taxes. According to the bankruptcy petition, Warwick owes $7 million to the federal government and $3 million to the state of California that reflects nine years of back taxes.
Warwick has thus far paid about $1m in back taxes but could not make her tax situation current due to the accumulation of interests and penalties. When she tried to negotiate a deal with the IRS and the California Franchise Tax Board for a payment plan the plans were rejected. When that happened, Warwick decided to file for Chapter 7 bankruptcy protection.
Warwick is the niece of vocalist Cissy Houston and cousin of the late Whitney Houston. She graduated from East Orange High School and started her singing career in gospel music. Her first single, “Don’t Make Me Over” was released in 1962.
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