In the last two years, Australian rapper Iggy Azalea released two chart-topping albums, received four Grammy nominations, and was slapped with two tax liens from the Internal Revenue Service.
More than half a million owed to the IRS is a big deal, celebrity status or not. Tax liens attach to assets, ruin credit, and can continue even after bankruptcy is filed. Getting the IRS to release a lien involves paying the tax, interest, and penalties in full, or by agreeing on a payment plan.
Azalea took to Twitter using #IggyNovela to express her frustrations with the members of the media who got a hold of her financial records. Tax liens are embarrassing, and she brushed it off by comparing her monthly IRS payment to her other monthly expenses, like her mortgage.
But Azalea shouldn’t be so quick to dismiss her ongoing run-ins with the IRS.
According to a recent report by the US Treasury Inspector General for Tax Administration (TIGTA), an estimated 22,866 taxpayers were not sent timely lien notices for the 2014-2015 tax year. By law, TIGTA is required to determine whether lien notices issued by the IRS comply with the legal requirements set forth in Internal Revenue Code Section 6320(a).
Why should the IRS hold taxpayers accountable for tax liens if they can’t comply with their own regulations?
Moreover, it’s interesting that the “Fancy” singer received her first tax lien when her net worth reached $10 million. The second came shortly after she was seen wearing a 10-carat engagement ring from then beau Nick Young, a professional basketball player with the Los Angeles Lakers.
Celebrities can often become easy IRS targets after they’ve had record-breaking years or are seen flashing luxury items. Perhaps the most high-profile defendant in a criminal tax case is Blade trilogy star Wesley Snipes. He spent three years in a federal prison for failure to file taxes and made headlines when he sued the IRS for an “abusive” $17.5 million tax bill.
It isn’t completely clear if Azalea was one of the nearly 23,000 taxpayers to fall victim to the IRS’s negligence and incompetence. But holding the IRS accountable for basics, like sending out notices and other documents on time, can help spare some embarrassment and cut back on confusion. This would make it much easier for all taxpayers to comply, without the ultimatum of a tax lien.