This is a significant week in the bankruptcy petition efforts of singer Dionne Warwick. Readers of this blog may recall a post a few months back in which we reflected on the fact that the 72-year-old pop artist had filed for Chapter 7 bankruptcy protection. It's a case we suspect many in Texas and around the country may be following.
The main target of the petition is a multimillion dollar bill that the Internal Revenue Service alleges Warwick owes. The sum represents what the IRS says is underpaid income taxes and penalties that have been accruing since 1991. Warwick is looking to have the claimed liabilities discharged, saying that she has more than paid what she originally owed over the past two decades as she's been trying to resolve the dispute.
The bell for the latest round in the battle is slated to ring this week. Attorneys for Warwick are looking to block efforts by the IRS to recover what it says the singer owes by going after the assets of two different companies; KMBA Productions and Star Girl Productions Inc.
Both organizations have ties to Warwick. But her attorneys say the relationship is limited to them paying her for engagements booked through them. They are set to argue this week that their client has no direct business interest in either of the operations either as an owner or member of their boards, so the IRS shouldn't be allowed to take aim at them to try to get what Warwick allegedly owes.
At the same time, they add that Warwick's liability on taxes should be limited to about $25,000. The rest should be dischargeable.
A judge in New Jersey is supposed to hear further arguments from both sides sometime this week.
Source: The Wall Street Journal, “Dionne Warwick Takes on the IRS,” Jacqueline Palank, June 10, 2013