The education of Lauryn Hill on the legal consequences of tax evasion will continue in prison, as the singer has been sentenced to three months behind bars.
Hill, 37, of South Orange, New Jersey, was also sentenced to three months of additional home confinement on Monday, the Associated Press reports. It wasn't immediately clear where she'd be incarcerated, but TMZ reports the judge ordered her to report to prison by July 8.
The five-time grammy winner pleaded guilty to failing to file tax returns for more than $1.8 million in income between 2005 and 2007, reports Rolling Stone. But just before Lauryn Hill's sentencing, she apparently paid up on her tax debts.
A Taxing Case
Hill faced up to a year in prison for each count of tax evasion. Just before her sentencing, she forked over more than $970,000 to cover both her state and federal tax liabilities. Because she made good on her overdue taxes, the singer's lawyer suggested she should just get probation.
The judge, apparently, didn't agree.
The IRS realizes that the tax code looks like Webdings to most people. They know mistakes can happen. When you make an honest mistake, it's negligence. But in Lauryn Hill's case, it's a question of tax fraud.
Tax fraud occurs when someone doesn't pay federal taxes on purpose. Indeed, when asked if she had "intentionally and willingly" neglected to pay her taxes at an earlier court hearing, Hill responded "Yes."
Celebrities and Tax Liabilities
In her defense, celebrities seem to have it rough when it comes to taxes. When us normal working stiffs get our paychecks, the taxes (both state and federal) are already removed. But if you get paid in royalties or checks for each performance, those checks usually don't have taxes removed. Ideally, celebrities are supposed to set aside tax money to pay when April 15 rolls around.
They're also supposed to pay estimated taxes four times a year based on their income. That's also the rule of thumb for freelancers, small business owners and other self-employed people.
Fortunately for celebrities, they can get "creative" in paying their owed taxes.
Lauryn Hill reportedly paid off her back taxes with a loan secured by two pieces of real estate -- which means if she doesn't repay the loan, she may lose those properties. She also teamed with Sony to put out new music, and last week released the new song, "Neurotic Society (Compulsory Mix)," reports Rolling Stone.
If only we could all pay off our taxes with fun tunes...
- Lauryn Hill's Tax Woes: Federal Charges for Not Filing Tax Returns (FindLaw's Celebrity Justice)
- Ja Rule's Tax Evasion Gets Him 28 More Months in Jail (FindLaw's Celebrity Justice)
- Wesley Snipes Tax Evasion Appeal Denied by Supreme Court (FindLaw's Celebrity Justice)
- Charge It to the Game: 5 Reasons Why Rappers Go Broke (FindLaw's Atlanta Bankruptcy Law News)