Bucking Taxes
The recent IRS asset seizure on rap artist Young Buck has brought a spotlight once
again on the challenges entertainers and other individuals face when it comes to making money and paying taxes. Young Buck whose real name is David Brown, owes the IRS $137,135.95 in taxes for 2006 and $27,201.81 in taxes for 2008. In the seizure, the IRS took among other things jewelry, recording equipment and clothing.
Mr. Brown is not unique in this experience. Every so often it happens. Somehow the manager or the attorney or the accountant or the brother or name someone, didn't take care of the tax liability that comes with making money through entertaining. Mr. Brown contends that his managers didn't take the necessary steps to resolve this.
So how can entertainers and other individuals solve this problem? Because in all fairness they are entertainers first and business people second, if at all. Larry Ellison can provide world class software but sing like Tony Bennett he can't.
The best solution for many would be to hire a payroll service company. The payroll company could work directly with the entertainer or accountant and process everything that goes to the IRS and states for them. Then the payroll company would provide them with the relevant tax filing information.
In many cases if there is an incorrect amount that is paid by the payroll company they will take on the liability. Something the entertainer's accountant, manager, attorney or whoever will not do. Young Bucks manager contends he took appropriate action.
The process to do it is pretty straight forward. Whenever the artist receives any sort of money from performing or royalty they would deposit the money (check or cash) into a corporate business checking account as directed by their accountant. In Young Bucks case he could have deposited his earnings into one of his corporate checking accounts. Like the one he probably has for Cashville Records.
Then from that Cashville Records business checking account, the payroll company would electronically withdraw the money and process all the necessary taxes and obligations. Then whatever is left over would be electronically deposited into the personal checking or savings account of David Brown. Again, Young Bucks real name. Naturally the payroll company charges a fee for this service. But it's worth it.
To find out what it'll cost, the accountant or manager can simply call the companies up and request price quotes. Then they can compare the companies.
Once the payroll company is chosen the artist can get back to creating and the accountant or manager is freed up to tackle other issue for the artist. They can do this and have peace of mind knowing that all IRS and state taxing issues are safely covered.
Bucking Taxes
By: Kolonji Murray
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