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INSIDE
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A Shrunken IRS Wields More Weapons Against Taxpayers
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Creating a Vacation Vibe at Home How Toph’s Advice Helped a Divorced Couple Slash Their IRS Debt Ashley’s Corner: Raising Kids to Make Smart Choices 4th of July Cocktail
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Queen Bey Beats the IRS
How Beyoncé Triumphed in a Multimillion-Dollar Tax Battle TOPH’S TAX NIGHTMARES
Cowboy Carter’s battle with the IRS appears to be nearing a close.
addition, the IRS ruled out legal and professional service expenses she had claimed on 2018 returns, alleging that Beyoncé had failed to support them.
The score: Beyoncé 1. IRS 0.
The IRS had also disputed an $869,000 deduction for a charitable contribution. Beyonce is known for supporting various charitable initiatives through her foundation, BeyGOOD, including scholarships, internships, small-business funding, and donations to UNICEF and hunger relief, hurricane relief, and wildfire relief organizations. For the 2019 tax year, the IRS had accused the singer of failing to support expenses claimed in connection with royalty income, including utilities, insurance, management fees, taxes, and depreciation.
The IRS went after the superstar singer in 2023 for nearly $2.7 million in taxes, penalties, and interest the agency claimed she owed from tax years 2018 and 2019. Beyond her enormous popularity and record Grammy award wins, it appears that Beyoncé has some pretty smart tax lawyers too. In a stipulated decision approved late last year by a tax court judge, Beyoncé agreed that she owes $709 in back taxes and penalties for the tax year 2018, and nothing for tax year 2019, according to Tax Notes, an online tax news and analysis publication. The amount now due from the pop superstar is less than 0.03% of the IRS’s original claim.
After the IRS entered settlement talks with the pop star, the agency was clearly satisfied by her counterarguments and documentation.
“I guess you could say that Beyoncé’s team made lemonade out of lemons,” a tax specialist not involved in the case told Tax Notes, referring to the title of the singer’s hit 2016 album. The irony, the observer added, is that Beyoncé likely had to spend tens of thousands of dollars on professional fees in a fracas over a tax bill that ended up being less than $1,000.
Clearly, the ruling was a taxpayer-friendly outcome.
The dispute surfaced in 2023 when Beyoncé filed a tax court petition disputing the IRS claims. In calculating her alleged tax debt for 2018, the agency had asserted that she had unreported royalty income. In
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