Pop singer Warwick seeks tax liens resolution through Chapter 7

| Apr 4, 2013 | Chapter 7 Bankruptcy |

Time has been good to Dionne Warwick, generally. The 5-time Grammy winning singer can point back to a decades-long career and a string of top hits. Those include such recordings as “Do You Know the Way to San Jose” and “Walk On By.”

The past 15 years, however, have been a bit harder for the 72-year-old pop music star, at least on one front. Starting in 1991, the Internal Revenue Service began citing Warwick for income tax issues. Experienced Texas bankruptcy attorneys know that when IRS tax bill issues open, they can sometimes have a way of growing exponentially.

In Warwick’s case, the situation has grown to a point where she owes somewhere in the vicinity of $10 million in IRS and California business taxes. The burden has gotten so onerous that late last month, Warwick filed for Chapter 7 bankruptcy.

Now, normally, taxes owed are not eligible for discharge under bankruptcy proceedings. There are exceptions, however. And Warwick’s attorney says that in her case, the exceptions apply. He notes that Warwick has always properly filed her income return and has spent years now trying to make good on all the liens that have been accrued.

But he says she was also the victim of unscrupulous management. And though she has more than paid off the original taxes owed, the penalties and interest have mushroomed. He says she has tried and failed repeatedly to work with tax agencies on finding a solution, and now that the dates of the tax issues are within the time frame allowed for discharge, she has opted to file for bankruptcy protection.

According to her petition, at 72, Warwick doesn’t make enough from her performances to do more than meet her monthly living expenses. She lists a monthly income of about $21,000 and monthly expenses of just $10 below that figure.

Her attorney says she is not unique among entertainers who rely on managers to deal with their financial issues and then find out too late that their affairs have been mismanaged. He says considering her efforts to erase the bills, it’s time to bring the matter to a close through bankruptcy.

Source: Rolling Stone, “Dionne Warwick Files for Bankruptcy,” Kathy Iandoli, March 25, 2013