Velvet Teddy Bear Fails to Pay Taxes
Ruben Studdard, the 2003 American Idol winner, owes the federal government $172,920 in unpaid income taxes. He also owes taxes to the state of Alabama in the amount of $21,730. Federal and state property liens were filed in Jefferson County Circuit Court in Alabama – where Ruben is from. Most of the taxes due are from 2003 when he won the $1 million recording contract.
The “Velvet Teddy Bear” also was awarded $2 million in a lawsuit against his former business manager – $500,000 to recover actual losses and $1.5 million in punitive damages.
It never ceases to amaze me that people do not plan better when they receive a windfall of cash or a massive increase in income. Why can’t they consult an accountant early on in the game and find out what their real situation is? Too many times it is spend spend spend and there is nothing left to pay the tax bill. Obviously, I am making assumptions into Ruben’s situation as I do not have first hand knowledge. Perhaps he did make the right choices and consult accountants and financial planners, but I doubt it. I also wonder who this “business manager” was that was misappropriating his money. Was he even qualified to do the job or did Ruben give him the job because he was a friend? I do question how good his relationship with his attorney could be. His attorney was asked about the liens and didn’t even know about them (unless he was playing dumb).
For a more in depth article, visit the Birmingham Business Journal article.