The 10 Biggest Tax Cheats in U.S. History

Tax Day is looming, and procrastinating yet law-abiding Americans are scrambling to prepare and submit their income tax returns to the federal government. Let’s face it, no one likes to give a portion of their hard-earned money to a group of people who typically seem to find ways to mismanage it. A couple of demographics in particular — single men under the age of 45 and rich folks — tend to have the most difficult time paying all they owe, even though they can afford it. Go figure that a few of the infamous tax cheats listed below fall under the latter demographic. They ultimately paid the price for their misdeeds, proving that Uncle Sam doesn’t take kindly to those who refuse to do their part.

  1. Walter Anderson, Telecommunications Tycoon

    The 1990s were a prosperous time for numerous American entrepreneurs, but with many, you wouldn’t even know it. Anderson found creative ways to effectively hide his massive income — $365 million to be exact — using offshore tax havens, drop boxes in the Netherlands and shell companies. In 1998, for example, he paid just $495 in taxes after claiming an income of $67,939, when in reality, he earned more than $126 million. He was so well off that he kept a multimillion-dollar art collection and once considered leasing the Mir space station. Anderson, now serving a nine-year prison sentence, claims he’s innocent despite pleading guilty in 2006.

  2. Al Capone, Mob Boss

    Determined to remove the powerful mob boss from the streets of Chicago, the federal government targeted Capone’s violation of prohibition law, and more significantly, his evasion of income taxes. It was Frank Wilson — not Eliot Ness — who conducted the investigation during a three-year period in which he oversaw the infiltration of the Chicago Outfit by federal agents in order to collect information from its accountants and bookkeepers. In 1931, Capone pled guilty to tax evasion charges and was ordered to pay $215,000 plus interest due on back taxes, equivalent to more than $3 million today.

  3. Leona Helmsley, Hotel Operator and Real Estate Investor

    Dubbed the “Queen of Mean,” Helmsley, the late New York City billionaire, lived up to her reputation, once stating that “We don’t pay taxes. Only the little people pay taxes.” Of course, “we” meant rich people. In her wake, she left many embittered employees, some of whom testified in her 1989 tax evasion trial, claiming she constantly terrorized them and their coworkers. The indictment was brought forth by Attorney Rudy Giuliani after contractors who worked on her 21-room mansion revealed their work — $8 million-worth — was illegally billed to the Helmsley’s hotels as business expenses. She spent 18 months in federal prison and eventually died a lonely woman, leaving a $12 million trust fund to her dog Trouble.

  4. Wesley Snipes, Actor

    Because the case involved an A-list — or former A-list — Hollywood actor, Snipes’ failure to file tax returns is probably the most infamous instance of tax evasion in recent memory. After cheating $12 million from the government, Snipes owes $17 million in back taxes plus penalties and interest, and now he’s serving a three-year prison sentence, one year for each count. Before reporting to McKean Federal Correctional Institution in Pennsylvania, he participated in an interview with Larry King in which he admitted to being nervous about the prison experience.

  5. Willie Nelson, Legendary Country Singer

    Nelson was certainly misbehavin’ in the eyes of the taxman in 1990, when essentially everything he owned — including his 44-acre Dripping Springs ranch, Pedernales Country Club and Recording Studio, instruments and memorabilia — was seized by the IRS due to $16.7 million he owed in back taxes. The episode came after the IRS examined his returns dating back to 1972, eventually determining he underpaid taxes for six years. Fortunately for Nelson, though, he had numerous friends who helped him get back on his feet. The American Agriculture Movement, a lobbying group for family farmers, purchased his ranch. Nelson was a well-known supporter of American farmers, raising them millions of dollars through Farm Aid concerts.

  6. Heidi Fleiss, Hollywood Madam

    Fleiss became somewhat of an icon of the 1990s when it was revealed that she ran a multi-million dollar prostitution ring featuring a high-profile clientele. Her trial for income tax evasion and laundering call-girl profits in 1996 was highly publicized, and resulted in a 37-month prison sentence. She was required to pay an undisclosed amount in taxes and forfeit more than $550,000 from the sale of her Beverly Hills home, ensuring she was financially crippled.

  7. Dennis Kozlowski, Disgraced CEO

    Your typical CEO of an American megacorporation isn’t afraid to exhibit the trappings of his or her success. Kozlowski, the former chairman of Tyco International, was no exception, as he paid $14.7 million for 12 paintings — including a Monet, Renoir and Bouguereau — to proudly display in his Manhattan apartment. The obvious problem: he didn’t pay the accompanying taxes, resulting in his 2002 indictment and eventual agreement to pay $21.2 million to settle charges, $3.2 million of which was in sales tax and interest on the paintings. In the process, Kozlowski and Mark Schwartz, the company’s former financial chief, were convicted of stealing more than $600 million from Tyco. Currently, Kozlowski is serving an 8.33-to 25-year prison sentence.

  8. Reuben Sturman, Pornographer and Businessman

    At one time the world’s biggest distributor of pornography, the late Sturman endured three decades of legal problems resulting from his shady business dealings. Not only was he subject to numerous raids during an era in which pornography wasn’t quite as mainstream as it is today, but he was also involved in numerous criminal activities, forging ties with the Gambino crime family. Not surprisingly, he failed to report $2.7 million in income from 1978 to 1982 — in 1979, he reported just $1,237 in taxable income — and accordingly was convicted of tax evasion and sentenced to 10 years in prison in 1989.

  9. OJ Simpson, Former Football Player and Actor

    Hardly the model citizen, Simpson has done a lot worse than just skipping out on his taxes — such as rob a hotel for its OJ-related sports memorabilia, which, coincidentally, occurred not long before the state of California declared in 2007 that he owed $1.44 million in back taxes. Now serving a minimum nine-year prison sentence, it appears OJ will escape the repercussions for the foreseeable future.

  10. Edward and Elaine Brown, Dental and Pest Business Owners

    Ed and Elaine are heroes to tax-haters everywhere. Their months-long 2007 standoff in their 110-acre home in New Hampshire, where residents “Live Free or Die,” made national headlines. The incident occurred after the couple was sentenced to five years and three months in prison for failure to pay federal income tax on $2 million of their income. Fortunately, nobody was injured, even though numerous weapons, ammunition, booby traps and explosive devices were found in their home. Now, Ed and Elaine are serving 37-and 35-year sentences respectively.

Comments