Richard Hatch: IRS Cheat
I was originally going to post this as a comment on the Daily Links page, but this story was riddled with so much goofiness that I wanted to make it a post.
It concerns Richard Hatch (no, not Apollo...the large, naked, homosexual Richard Hatch from Survivor) and his failure to pay income taxes on his Survivor prize money, as well as money paid to him by a Boston radio station.
I'm an accountant, and guys like Hatch are the reason why I hated dealing with taxes and tax filers. You always find some dolt who says this:
Richard Hatch, the first winner of CBS' "Survivor," said he thought the network was responsible for paying the taxes on his $1 million prize and that's why he didn't pay them.
and then follows it up with this:
Hatch told AP Radio Friday in an interview from Los Angeles that he was "absolutely not guilty."
Sir, you had income, and by your own admission you didn't pay taxes on it. Sounds guilty to me. Oh, but it gets better:
Hatch's lawyer, Michael Minns, told AP Radio that under California law, Hatch should have been classified as a CBS employee and therefore CBS was responsible for withholding taxes from his winnings.
"He was under the impression that they were either going to withhold from the check or pay the tax, and apparently neither occurred," Minns said.
OK, if he was under that impression, where did he ask about not having a pay stub attached to his check that showed the deduction? Why no alarm at not receiving a W-2? Seems to me that's something any "employee" would wonder about. So if he thought he was an employee, did he not call Mark "Marky Mark" Burnett or some CBS bigwig about it? In fact, let's look at the legal theory his lawyer is putting forth. He's saying Hatch should have been classified as a CBS employee. But that's not the way TV works, at least as I understand it (I used to be a bank examiner in Los Angeles and had the rare treat of looking through a network's financials as part of a loan review...and no, I won't say which network or which bank.). The ever luscious Jorja Fox of CSI is not a CBS employee...she is an employee of Alliance Atlantis Communications, which produces CSI. AAC then sells the show to CBS to air. CBS turns around and sells commercial time during the CSI broadcast, which is how it makes money.
Similarly, if Hatch was considered an "employee," it would have been with Castaway Television Productions Ltd., not CBS. But even Minns' reasoning is goofy, because as an "employee" Hatch would have had to fill out a bunch of employment paperwork, paperwork I bet he never was given -- because he was never an employee. Further, I'd bet his contract for appearing on the show covered the payout and specifically said he was responsible for paying the taxes, hence his lawyer's odd phrasing that Hatch "should have been" classified as a CBS employee.
Well, he wasn't. And he shouldn't have been. If anything, he was an independent contractor and I bet the contract language reflected that. In fact, I'm pretty sure Hatch did receive a 1099 showing receipt of the mill....after all, that's how the IRS knew about it, right? Or are we supposed to believe there are IRS employees who do nothing but watch for reality TV show winners and look through their subsequent tax returns? For you tax "honesty" proponents, don't bother answering...it's a rhetorical.
Anyway, it gets better. Hatch also failed to disclose $321,000 which was paid to him by a Boston radio station. Well, notice there isn't an excuse for that oversight. What, did his mythical status as a CBS employee hold him tax exempt for payments from New England radio stations?
Evidently not...rather it's something else:
Hatch said he was unfairly targeted by the IRS and prosecutors.
"I'm being used as an example, as a scapegoat. And I'm innocent," he said. "This is nothing more than their effort to use my notoriety to get other people to pay taxes."
Is that doublespeak for "I'm being targeted because I'm gay?" Even if I'm being paranoid about Hatch's statement, he still makes no sense. The laws apply to everyone. That he's a "notorious" figure (which I doubt...I still say most people who recognize the name Richard Hatch still think 70s television) doesn't indemnify him from tax laws.
It could be this is an honest mistake on his part. I vigorously doubt it, but the possibility exists. Still, mistakes hold consequences, even honest ones. Even assuming Hatch's explanation is correct, he was still negligent because it is his responsibility to make sure the taxes are all squared away...not anyone else's.
Future reality show winners, take note.
Posted by John Tant at March 14, 2005 07:36 AM
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|# March 14th, 2005 9:24 AM kris|
|If the IRS has someone whose sole duty is to watch reality shows and make sure the winners pay their taxes, I totally want that job. |
|# March 14th, 2005 3:34 PM jagorham|
|As an accountant who dabbles in taxes, and who was fortunate enough to get onto a game show a few years back, I shake my head at what Mr. Hatch has cooked up here (primarily, his own goose).
Before I had my taping for said game show, I had a very long (25 page plus) release form which stated in multiple places that I was NOT an employee of the network or the production company, that I was responsible for all taxes, etc. I'm sure Mr. Hatch signed similar forms.
The only possible leg he might have for his "CBS employee" argument would be for any promotional appearance done after the contest was over, such as the reunion show done in LA. I could see any income relating to that episode (and that episode ONLY) falling under that logic, but it's still faulty logic.
(BTW - he might better watch what he wishes for; I'm sure California would LOVE for him to be a CBS employee, and get their chunk of his change!)
Since he had a plea agreement ready to go and he backed out, they're going to throw the book at him. He's going to get to apply his "Survivor" skills in a Federal penitentiary.
|# March 14th, 2005 10:01 PM kris|
|Okay, I have to ask. What game show were you on? |
|# March 15th, 2005 11:07 AM jagorham|
|"Who Wants To Be A Millionaire." |
|# March 15th, 2005 12:57 PM james|
|awesome.. how did you do? |
|# March 17th, 2005 10:37 AM jagorham|
|Sad to say, I didn't get to the hot seat. But it was a blast nonetheless, and still get emails from folks when the episode reruns on GSN.
Back to Mr. Hatch for a second: Wasn't one of his pre-"Survivor" gigs a motivational speaker? I wonder how he reported his income for those things.