Ben Sissman, Attorney at Law
Free Consultation 901-730-4958
Toll Free 866-788-0394
Legal Services

Tax debt leads to bankruptcy filing for Grammy award winner

Grammy winning singer Dionne Warwick filed for personal bankruptcy recently, citing financial mismanagement and an overwhelming debt to the Internal Revenue Service.

Her filing indicates that despite many years of success in the music business, Ms. Warwick has only $10 of excess income each month after she takes care of her expenses, and that is not enough to pay off the more than $10 million she holds in debt.

The singer's publicist said that she is currently bankrupt as a result of many years of mismanaging her finances during the 1990s, when the tax debt was originally accumulated. At that time she did not address the growing debt to the IRS and eventually amassed significant late fees and interest on the principal sum that she owed, contributing to today's total.

She has apparently paid of the principal amount but finds herself unable to pay the remaining fines and interest and says that the IRS rejected her proposals to settle the debt, leading to her have to file bankruptcy out of necessity.

As tax season approaches, Ms. Warwick's unfortunate story shows how important it is to be careful with income tax filing and to address concerns about paying owed taxes right away, instead of waiting. Many Tennessee readers already know that trying to avoid debts does not make them go away, particularly when that debt is to the United States government.

Typically tax debt cannot be discharged using the bankruptcy process, but like exceptions for extreme cases involving student debt, sometimes it is possible to seek a discharge or a reduction in the principal in a specific circumstance.

Source: The Star-Ledger, "Singer Dionne Warwick declares bankruptcy citing $10M in back taxes," Victoria St. Martin, March 26, 2013.

More information about Chapter 7 bankruptcy is available on our website.

No Comments

Leave a comment
Comment Information

Office Location

Ben Sissman, Attorney at Law
44 North Second Street, Suite 403
Memphis, TN 38103

Phone: 901-730-4958
Memphis Law Office Map

Let's Start By Discussing Your Debt

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy