The 41 year old rapper might be past his peak and not have released an album in a few years, but fans are coming to the rescue in thanks for the memories. The IRS has a lien against the rapper’s earnings that could include his profits from ticket sales and an upcoming tour. The $2.4 million owned to the federal taxing authorities isn’t the only debt weighing in this summer – the state of Missouri is claiming almost $150,000 owed and has moved to attach the rapper’s bank accounts in order to get paid.
Sooner or later, the IRS always gets paid, and until you do pay they can make things very uncomfortable. A lien just makes sure that if you have any earnings that they go toward your debt, but seizures can also be on the table – bank accounts, stocks, or tangible property can be seized and sold. If you have a delinquent tax debt over $50,000, the IRS can even ask the State Department to revoke your passport. Debt like this doesn’t pile up overnight, and in Nelly’s case, it shouldn’t have. Unfortunately, young artists and athletes are often not financially literate, and are often at the mercy of managers and agents. They trust people they shouldn’t, and spend before tax income as if the well will never run dry.
I’ve written before about how young athletes get in over their heads, and the same applies to artists. Emotional bonds can be a powerful thing, and sometimes the desire to give back can get in the way of good sense. The desire to measure up to a peer group is also a powerful inducement to overspending. Cars, houses, gold, and all the trimmings can eat up the money and dig downward from the bottom line. All that hustle, and then you end up in bankruptcy court. It’s possible that if Nelly is in rough enough financial shape that he could file bankruptcy, and possibly discharge some of that debt. Either way, he needs to shed entourage and hangers on, and use this as a wakeup call. He might get in touch with Morgan Stanley, who started a first of its kind wealth management division for athletes and entertainers.
If you feel a little like Nelly, it might be time to consult with an attorney and get a grip on your present financial state. The IRS might not be knocking on your door with a seven-figure lien in hand, but you can be facing some tough numbers even without that. Call our West Palm Beach or Fort Lauderdale office for a free consultation, and we’ll work with you to get you to a good resolution. If you have tax trouble, credit card debt, student loan debt, or all of the above, we are here to help you.
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