Hatch is now appealing his conviction, arguing that the trial judge improperly prevented his lawyer from pursuing the defense contention that CBS promised to pay the taxes on the prize because he had caught the show’s producers cheating by smuggling food to other contestants during the taping of the show.
The prosecution points out that the judge told the defense attorney several times that he could present evidence that the show’s producers promised to pay the taxes, but the lawyer simply chose not to ask Hatch about the arrangement when he was on the stand. The attorney also never asked SURVIVOR creator and producer Mark Burnett about the alleged promise in cross-examination.
Any competent tax preparer knows that even if CBS was going to pay the taxes the $1 Million still had to be reported as income on Hatch’s 1040. The proper procedure would be as follows: CBS would calculate the estimated tax liability on the prize and either pay this to Hatch or directly to the IRS as an “estimated tax payment” or “withholding”. The Form 1099-MISC issued to Hatch would include the $1 Million plus the amount of the tax reimbursement, additional taxable income to Hatch. The amount on the 1099 should then be reported as “other income” on the idiot’s Form 1040.
In addition, CBS would certainly not have paid the tax on Hatch’s talk-show or rental income, so that is no excuse for failing to claim the other income.
FYI, Richard Hatch was named “Taxpayer of the Year” by the readers of the ROTH AND COMPANY TAX UPDATES blog (see the January 4, 2007 posting), with Wesley Snipes a close 2nd.
As I have stated in previous postings, Hatch’s tax evasion clearly indicates the level of intelligence, or rather lack thereof, of participants on so-called “reality television” shows.
* Along the same lines, the January 3, 2007 posting to the TAXGIRL blog reports that “Fingers Gets Fingered”! It seems that Major League baseball pitcher and Hall of Famer Rollie Fingers owes the state of Wisconsin $1,433,609 in income taxes. That number makes him the seventh biggest tax delinquent in the state. Fingers spent more than 15 years with the Oakland A's and the Milwaukee Brewers and was inducted into the baseball Hall of Fame in 1992.
* Here is an unsolicited email I received from Judy Monday of Searcy, Arkansas:
“When my 16 year old son received his first paycheck, he came home in a state of total disgust. He said, ‘Mom, my boss said he had to withhold a lot of my money because I had to support poor old Uncle Sam. Would you please call and tell him I do not have an old Uncle named Sam and even if I do, I am not interested in giving him my money without knowing the reason he is poor. He could have just squandered his money away for all I know.’
Truer words were never spoken!”