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Fat Joe, a rap artist famous for his public feud with 50 Cent, pleaded guilty to tax evasion on Thursday.
The rapper, whose given name is Joseph Cartagena, appeared in federal court in New Jersey and admitted to not paying his taxes for two years, namely 2007 and 2008. Federal prosecutors had claimed that he failed to pay taxes from 2007 through 2010.
It doesn't matter how much money you owe, the IRS will find you. But for someone like Fat Joe, the amount is significantly higher.
During 2007 and 2008, Fat Joe made nearly $3 million from performances and music royalties, according to the Associated Press. The government is claiming that he owes more than $700,000 in unpaid taxes over four years.
Fat Joe isn't the first celebrity who failed to pay taxes to the federal government. How is it that famous people seemingly can't afford their taxes?
The issue probably isn't a lack of funds; it's likely poor management. This is one area in which your life might be a little easier than a celebrity's.
When you get your paycheck it already has the taxes removed, both state and federal. It's true that come tax time you might still owe some more, but a significant portion of your tax burden is taken care of.
If you get paid in royalties or one-time performance payments, however, those checks don't have taxes removed. Ideally, celebrities are supposed to set aside tax money to pay come April 15.
Those people are also supposed to pay estimated taxes four times a year based on their income.
It's not just famous people either. Freelancers, small business owners, and other self-employed people are expected to pay estimated taxes and set money aside for tax time.
After pleading guilty, Fat Joe was released on bail, reports The Miami Herald. He's hoping to have all his back taxes paid before his sentencing hearing in April.