View Full Version : Richard Hatch VS the IRS
When this story first broke, we all (moi included) jumped to the conclusion that Hatch was an idiot. After he won, I have liked Hatch and now it seems that he may not be the idiot we thought.
There is more to the case than originally broke. It seems that the contract with CBS may have indicated that CBS would be responsible for applicable taxes. I';m withholding judgement but the question again is: "How could Hatch be so ignorant?" Ans:" perhaps he wasn't." High powered and expensive lawyers on both sides are going to have fun with this one.
There is some precedent. In SC, the lottery prizes are net and the State absorbs the taxes. Of course, any gains realized by investing the prize money are taxable to the individual.
CBS has more to lose in this one since the seven other winners will also have a case if Hatch wins.
The question may become: "How could CBS be so stupid?" Can you say Dan Rather? :munchin
Bellerophon
03-16-2005, 11:47
It seems that the contract with CBS may have indicated that CBS would be responsible for applicable taxes.
Did CBS agree to withhold taxes, or pay the tax due?
http://www.legalzoom.com/articles/article_content/printer-article13193.html
The only thing I can think of to add is that I am pretty sure that you cannot contract away tax liability because the tax paid on your behalf is income which you will be required to pay tax on. There is a method to avoid tax on prizes but it is a serious multiple step transaction where prize winner never sees any of the proceeds.
"How could Hatch be so ignorant?" Ans:" perhaps he wasn't." High powered and expensive lawyers on both sides are going to have fun with this one.
There are multiple schools of thought on why people commit tax crimes.
1. Shock and horror- People are so astounded by the amount they owe that they stick their heads in the sand and hope the tax liability will "go away".
2. Plain old cheaters who think that they won't get caught. Normally the corporate diversion "one for the cash register, one for the pocket" etc.
3. Tax Protestors- Something about Flags with gold fringe signifying that the court has no jurisdiction, and some rambling about the constitutionality of taxes. Generally the Militias or the Aluminum hat crowd.
The conviction rate for tax crimes is above 90%. It is almost perfect, but they don't brag; the AUSA's and Attorney's at the IRS will nail a cheat or fraud to the wall with a slow methodical finality that is unavoidable. A huge amount of effort goes into each case prior to the criminal even knowing they are under investigation.
Mr. Hatch is going to jail.
Might be some logic to it.
If I had a million bucks and could avoid paying taxes for a few years and feign ignorance... I'd invest the money and pay the taxes late.
Best of luck to the millionaire homo streaker... damn the man!
I must be getting old. I read the name Richard Hatch and thought this was a thread about Battlestar Galactica.
"Survivor" winner indicted for tax evasion, fraud, charity swindle
SEPTEMBER 8--After rejecting a plea deal earlier this year, original "Survivor" winner Richard Hatch was named today in a 10-count indictment charging him with tax evasion and fraudulently using charitable donations to cover personal expenses. According to the indictment, a copy of which you'll find below, Hatch never bothered to report his 2000-01 haul for winning the initial installment of the CBS reality series--a $1 million check and a $27,000 Pontiac. The 44-year-old Newport, Rhode Island resident also never told the Internal Revenue Service about nearly $400,000 in other income. Included in that six-figure sum was $36,500 in donations to Horizon Bound, a purported charity established by Hatch. Prosecutors allege that Hatch actually used that money for personal expenses. Along with two tax evasion counts, Hatch was charged with filing a false return; mail fraud (four counts); wire fraud (two counts); and bank fraud. He faces a maximum of five years in prison (and a $250,000 fine) on nine of the felony charges, though the bank fraud rap carries a 30-year max and a $1 million fine. Hatch reneged on a January plea agreement calling for him to cop to a pair of felony tax evasion counts. Prosecutors responded by opening a grand jury probe that resulted in Hatch being hit with eight additional felonies. (18 pages)
Link is on The Smoking Gun:
http://www.thesmokinggun.com/archive/0908051hatch1.html
Monsoon65
09-09-2005, 11:20
I must be getting old. I read the name Richard Hatch and thought this was a thread about Battlestar Galactica.
You stole my thunder! I was gonna say, "And I use to love Battlestar Galactica when I was a kid!"
Bellerophon
01-25-2006, 19:18
The IRS almost always wins. They like to pick out celebs and prosecute them just in time for tax season headlines.
http://www.foxnews.com/story/0,2933,182778,00.html