TOPH SHELDON CPA FOR THE SELF-EMPLOYED ® 9200 MONTGOMERY RD., STE. 7B CINCINNATI, OH 45242 513-342-4000 WWW.TOPHCPA.COM
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INSIDE 1
Are Your Riding the ‘Cash Flow’ Roller Coaster of Self- Employment?
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Don’t Let the IRS Stress You Out
Streaming After ‘Game of Thrones’
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When Was the Last Time You Took a Vacation?
Classic Apple Crisp
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The Troubled Life of Robert Downey Jr.
Toph’s Tax Nightmares
Iron Man vs. the IRS Today, Robert Downey Jr. is one of the biggest film stars in the world. He’s beloved for his portrayal of Tony Stark, aka Iron Man, along with many other roles, including Sherlock Holmes. But his current fame came after a long streak of legal trouble that started in the 1980s, peaked in the‘90s, and continued into the 2000s, right up until he had an“aha” moment. In the‘80s, Downey was making movies left and right, even joining the cast of Saturday Night Live. He was in his 20s and riding high. Unfortunately, the success went to his head. By the mid-’90s, his jail-time streak began. He was arrested on charges relating to drugs and violating probation. In the middle of the arrests, jail time, and eventual prison time, Downey racked up a huge tax bill. It’s hard to pay taxes when you’re behind bars and spending a majority of your earnings on assembling a legal team. Between taxes owed to the State of California and the IRS, Downey owed $2 million. With every passing criminal charge and arrest, paying off that tax bill became harder and harder. It also became increasingly difficult for Downey to find work in Hollywood. He would land roles initially, but no insurance company would insure any movie Downey was a part of. There was no trust. If Downey couldn’t work, his tax bills would remain unpaid. Between recognizing the industry’s distrust of him and the high likelihood he’d relapse into poor behavior, Downey eventually realized he really needed to change his life.
In one of his mid-2000s films,“Gothika,”the film’s producer withheld 40% of Downey’s pay until production ended. This was considered insurance against Downey’s addictive behavior. The“pay withholding clause”was built into Downey’s contract before production began, and the actor signed off on it. This type of clause was included in many of Downey’s films in the 2000s.
After several successful movies in that era, Downey was back on track. He was cast in Marvel Studios’2008 movie,“Iron Man,”which proved to be a huge success for the star. He paid off all of his debts, including his $2-million tax bill, and didn’t look back. Downey has stayed out jail and remained on good terms with the IRS ever since.
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