Are you a legal professional? Visit our professional site

IRS Doubts Nicolas Cage Gave Away $1.8M in Gifts

Article Placeholder Image
By Stephanie Rabiner, Esq. on April 18, 2011 6:46 AM

For Nicolas Cage, tax problems are nothing new.

On the heels of a 2009 standoff with the IRS, TMZ reports that the agency has filed a federal tax lien against the actor, claiming that he now owes the government taxes on $1.8 million worth of gifts.

The IRS wants its $624,934.64 and they want it now.

Cage is already making payments to the IRS on $14 million in back taxes that he failed to pay from 2002 to 2007. He blames his former business manager and accountant, Samuel Levin, for the oversights.

The just-filed Nicolas Cage tax lien--which he will also likely blame on Levin--alleges that the actor gave away $1.8 million in gifts between 2004 and 2009, but failed to pay the government its 35% cut.

If you're wondering about gift taxes, they refer to the amount of money a person owes the government when he transfers valuable property to another person.

As of 2011, the tax code permits an individual to give any number of people up to $13,000 per year without paying taxes on the transfer. Anything beyond $13,000 per person, and taxes must be paid on the excess amount.

The government also caps the amount of tax-free gifts a person may give over his lifetime. Until recently, individuals could only gift up $1 million without paying taxes. This is most likely why Cage owes taxes, given that he gifted $800,000 over the limit.

Given the excessive amount he already owes in taxes, chances are the Nicolas Cage tax lien isn't going to lead to a happy ending.

Related Resources: