The rich, the poor, the famous and the infamous can all have tax problems, since it seems that no group is immune from this issue.
TMZ is reporting that during the production of “Scary Movie 5,” Lindsay Lohan explained her tax woes to Charlie Sheen. As you may recall from our February 17, 2012 blog, the IRS filed a Notice of Federal Tax Lien reporting an IRS tax liability of almost $250,000 that dates back to 2009 and 2010. Apparently Lohan and Sheen became friends during the filming of the movie, and Sheen sent Lohan a check for $100,000 to help with the tax debt.
Generally speaking, unless Sheen made a bona fide loan, interest at or above the applicable federal rates, stated term of repayments, etc, then the money lent may be considered a taxable gift. In 2012, if you give a gift to someone totaling more than $13,000, other than to your spouse, then you are required to file a United States Gift, and Generation-Skipping Transfer, Tax Return (Form 709). Under current law, there is a $5,120,000 lifetime gift tax exemption, part of the Bush tax cuts, that is expiring at the end of this year. Therefore, if Sheen is below the lifetime gift tax exemption, then taxes may not be owed.
Regardless, it was a good thing that Sheen stepped in, because the IRS can be relentless as it attempts to collect delinquent taxes. The IRS already filed a federal tax lien against Lohan and may have met its prerequisite for enforced collection, i.e. wage garnishments, levies, seizures, etc, if she has not entered into a collection alternative, i.e. installment agreement, offer in compromise, currently not collectible, bankruptcy etc. Sheen did Lohan a big favor, and hopefully she’ll find a way to pay off the rest of her debt before the IRS turns nasty.