German authorities accused tennis legend Steffi Graf of tax evasion in 1995. Further investigation revealed the tax cheat was actually Steffi’s father, then manager of Steffi’s finances. The charge against Steffi was dropped (she paid back what she owed, 1.3 million deutsche marks), while her father, Peter Graf, ended up spending 25 months in prison.
Financial problems plagued Judy Garland’s adult life. Her troubles culminated in 1964 when her $4 million debt to the IRS forced the agency to repossess her home. Five years later, she died at the age of 47.
In 2008, Annie Leibovitz borrowed $15.5 million from a financial company in order to pay federal and state tax liens totaling more than $1.4 million, and also to make mortgage payments on multiple homes and settle large debts with vendors. A significant part of the collateral Leibovitz presented in exchange for the loan was the copyright to virtually every single one of her photographs.
Singer, songwriter, and gay activist Melissa Etheridge protested the passage of Proposition 8 in California by announcing she would no longer pay taxes in that state. She argued that, if she wasn’t going to have the same rights as other citizens (namely, the right to marry whomever you want to), then she wasn’t going to pay the same taxes.
Sometimes known as the Hollywood Madame, Heidi Fleiss got busted in the early 1990s for operating a prostitution ring that catered to the entertainment industry. Convicted of income tax evasion and related crimes, she served 21 months of a three-year sentence in a federal penitentiary.
In 2002, two years before she was found guilty of insider trading, Martha Stewart stood in a New York courtroom contesting that she didn’t have to pay tax on her summer home in the Hamptons, because she had not spent enough time there to warrant the tax. In the end, the judge ruled against Stewart and ordered her to pay the $220, 000 owed plus additional fines.
Leona Helmsley, or the Queen of Mean as the press dubbed her, was famously alleged to have said, "We don’t pay taxes. Only little people pay taxes." In 1989, the late billionaire hotel operator was convicted of federal income tax evasion among a litany of other tax crimes. She was sentenced to 16 years in prison, but spent only 19 months behind bars.
In 2009, the California Franchise Tax Board listed the top 250 tax delinquents in the state. Singer Dionne Warwick made the top ten. According to the report, she owed approximately $2.2 million in back taxes. Her publicist has stated to the media that Warwick intends to resolve her debt and is currently in the process of doing so.
Janine Lindemulder is the porn star ex-wife of Jesse James, the celebrity motorcycle builder. Lindemulder pled guilty in 2008 to charges of willful failure to pay federal income taxes. She was sentenced to six months in prison and ordered to pay $200, 000 in back taxes plus fines. Upon her release in 2009, she entered into a custody battle with James over their daughter. Sandra Bullock, James’s ex-wife, contributed testimony. In December of 2009, roughly one year after Lindemulder pled guilty in a federal court, James won the custody case.
FOR A SUCCESS STORY ON WOMEN WHO HAVE FALLEN INTO MONEY, READ "MONEY CHANGES EVERYTHING: FINANCIAL WINDFALLS" HERE.