Richard Hatch May Not Survive IRS. Will You?
Arguably reality television’s biggest star, Richard Hatch, has been
indicted for tax evasion. His strategy with the IRS wasn’t as nearly as
good as his strategy on Survivor.
By Stanley H. Block
In 2000, when CBS broadcast
the first season of the reality TV show Survivor, Richard Hatch became an
overnight star.
People across America knew
him as the shirtless islander who had cooked up the perfect strategy to
stay the longest on the island and win $1 million.
After winning Survivor,
Hatch’s career took off. The man from Providence, R.I., returned to star
in a number of other reality shows, including Survivor: The Amazon - The
Reunion in 2003 and Battle of the Network Reality Stars this year.
Hatch’s strategy on Survivor
and other television shows has been perfect. But he hasn’t had as much
luck with the Internal Revenue Service.
Hatch, now 44, was indicted
in September by a grand jury in Rhode Island. The 10-count indictment
charges Hatch with tax evasion, tax fraud, and a scheme to defraud a
charitable organization.
According to the indictment,
Hatch hired two accounting firms to prepare his 2000 tax return. Both
firms accounted for Hatch’s $1 million in Survivor winnings.
The first company estimated
that Hatch owed $441,501 in taxes. The second estimated $234,807.
Hatch apparently didn’t like
either number. According to the indictment, Hatch instructed one of the
firms to put together a tax return that did not include his $1 million in
winnings. That firm, authorities say, instructed Hatch that the return was
for “informational” purposes only.
But the Survivor winner had
another strategy: He filed that informational return, the indictment says.
And the federal government —
surprise, surprise! — found out.
That’s not all.
While investigating Hatch’s
alleged tax evasion, the government discovered other alleged crimes.
According to the indictment, Hatch also:
-
Did not
report to the IRS a $27,074 Pontiac Aztec given to him in 2001 as part
of his Survivor prize.
-
Did not
report $326,540 for appearances on a radio show.
-
Did not
report $28,104 in rental income received in 2000 and 2001.
-
Allegedly
used $36,500 in charitable donations for personal use.
-
Allegedly
used for personal purposes a $10,000 prize from The Weakest Link that
was supposed to go to charity.
If convicted, Hatch faces up to five
years in prison and a fine of up to $250,000 for each of the 10 counts.
The first Survivor star is going to
find it was much easier to survive on a deserted island than battle the
IRS. Do you need to learn the same lesson?
Stanley H. Block is a Maryland State Tax
Attorney and a member of the American Society of IRS Problem Solvers. You
can contact him at 410-727-6006 to obtain a free subscription to his newsletter
titled The IRS Times & Inquirer.
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