Owing more than $10 million in back taxes, singer Dionne Warwick, a regular at the top of the Billboard chart for four decades, has filed for Chapter 7 Bankruptcy. According to a petition filed in U.S. Bankruptcy Court in New Jersey last week, the beloved singer claimed to have only $10 left at the end of each month after paying expenses. Considering her monthly expenses, it does not seem that Warwick is as bad off as the petition implies.
The 72-year-old, five-time Grammy Award winner lives in a 3,200-square-foot home in New Jersey. Warwick pays $5,000 a month for housekeeping, $4,000 for a personal assistant and another $11,940 in other monthly expenses, the bankruptcy petition stated. Although far from the poverty line, the singer remains unable to pay her back tax bill, due to its size.
With $25,500 in assets and $10.7 million in liabilities, according to the court papers, Warwick had no choice but to file for bankruptcy. Warwick owes nine years of back taxes, totaling $7 million, to the federal government and $3 million to the state of California, according to the bankruptcy petition. A Chapter 7 Bankruptcy might have been the only option with such extensive tax debts, but other tax resolution services could have applied as well. Had Warwick worked with Greenberg & Bass, the firm would have recommended the tax resolution services of the Tax Resolution Institute.
Warwick’s attorney, Daniel M. Stolz, said the singer paid more than $1 million toward back taxes. “Ms. Warwick had a business manager who mismanaged her affairs,” her attorney tells Rolling Stone. “Before she knew it, she owed a gazillion dollars in taxes. She’s actually paid more than the face amount of the taxes, but with all of the crazy interest and penalties that they add, the number kept mushrooming – even though she paid off the amount that she owed in terms of the actual taxes.”
Stolz said Warwick tried to work out payment plans to the Internal Revenue Service and the California Franchise Tax Board for taxes owed. The plans, he said, were rejected. “She really had no choice… “The taxes are of an age where under the bankruptcy code, they’re dischargeable taxes,” Stolz says. “We’ve found that we had no other resort other than to file bankruptcy so that we could finally get this off her back.”
Greenberg & Bass understands that perspective. When people find themselves in such a bind, no matter the level of their prominence or past success, filing for bankruptcy is often the only logical option. If you want to know whether a bankruptcy is the best answer for your delinquent tax debts, please contact both Greenberg & Bass and the Tax Resolution Institute at 800-401-5926 to set up a free consultation and find out whether a Chapter 7 bankruptcy or tax resolution services make sense for you.
Tax Liability of Dionne Warwick
|Service fees to prior manager||$237,512.97|
|Credit card purchases||$20,000.00|
|Business taxes 1990-1998||$3,246,500.46|