[Text/Observer Network columnist Frederick]
Recently, the "emergence" of a new "quantifier" has made the public, who are tired of making up classes for May Day, a thrill - "a cool".
As a unit used to describe money, the "total value" of "Yi Shuang" totaling 160 million yuan (according to the exchange rate of the day of this article, 20.41 million euros) is not "conspicuous" compared to the familiar "one tor",[1], "one Luo"[2], "one monkey" [3], but considering that the output of this monetary unit only takes 77 days, this has to make "Yi To", "Yi Luo" and "One Monkey" ashamed of themselves, probably only the "Yi Za" [4] that makes Real Madrid fans feel sad ] can be "comparable".
160 million, this "monthly income of more than 10,000" white-collar workers do not eat or drink, need to be from Tang Ruizong three years (687), that is, three years before Wu Zetian ascended the throne, to earn enough figures, in order to save enough, but also once again attracted the public's attention - such a huge amount of money, whether its payment and acceptance is legal, whether the parties involved in tax violations, and how common is such a similar situation in China, especially in the Chinese entertainment industry... And so on and so forth. Immediately after the "Yi Shuang" incident, many celebrities cancelled and dissolved the companies they held.
In fact, the so-called "celebrity tax-related crimes" are not unique to China, even in the United States and Europe, where "only taxes and death are eternal", there have been many celebrity tax-related crimes in history.
And it is precisely through the joint efforts of countless people of insight that "only paying taxes and death are eternal", which is no longer just an "occasional word" in Franklin's letters, but has become an "iron law" strictly observed by the whole industry and even the whole country.
I. "Sullivan Case" and "Al Capone Case"
"Stars represented by entertainers" - "maintaining a luxurious life" - "tax evasion and tax evasion", when it comes to tax-related crimes, the above three concepts may involuntarily appear in the minds of ordinary people.
Yes, in modern society, tax-related crimes such as tax evasion and evasion are indeed an important "means" to maintain a luxurious life, and it seems natural that entertainers whose incomes are much higher or more opaque than those of other industries (or even one of them) are linked to "luxurious life".
However, in the early days of history, it was not the Hollywood stars who hooked up with tax-related crimes because of their luxurious lives, but their "bosses" at that time, the major shareholders of many Hollywood film companies, and gangsters.
In the 1920s, when the United States was almost a haven for gangsters, the judiciary was almost helpless against them when they rode in luxury cars, drank champagne, and armed with a modified "Thompson" submachine gun on the street.
Intimidated by the threat of gangsters, the vast majority of ordinary people who are "too close to the bullets of gangsters and too far from the protection of the judicial organs" dare not come forward to testify, and at that time, the US judicial organs lacked both monitoring equipment, monitoring technology, and necessary manpower, and many local law enforcement personnel had more corruption problems, and even took bribes from gangsters as normal income, so that countless gangsters could still get away with it and continue to seek pleasure after committing crimes.
A cartoon satirizing corruption in American politics during Prohibition in the 1920s
Faced with the growing gang crime, Marbel Walker Willebrandt, then assistant federal attorney general and later known as the "Lady of the Law," offered a new perspective.
She pointed out that the gangsters' lives are so luxurious, but none of them have taken the initiative to provide tax forms and file taxes, so there must be tax evasion, so in the case that the conventional judicial crackdown has failed, it is advisable to try to prosecute tax-related crimes to combat the gangsters.
Willebrandt's views were strongly supported by the Federal Ministry of Justice and even by President Coolidge. Willeblant then tested the knife in the indictment of a South Carolina liquor smuggler, gangster Manly Sullivan, for not paying taxes on a $10,000 income from auto agencies and "beverage sales" in 1921.
In the South Carolina District Court, Sullivan was convicted, but in 1926 the district court's decision was overturned by the federal Fourth Circuit on the grounds that requiring Sullivan to provide a tax bill for his "unlawful income" would constitute "self-incrimination", and therefore Sullivan's conviction violated the Fifth Amendment's requirement that "judicial process justice" in particular "indicted persons cannot be required to self-incriminate".[5]
The case eventually hit the U.S. Supreme Court, where Justice Oliver Wendel Holmes Jr. was finalized. He noted that alcohol smugglers should be taxed on their income, and that the Fifth Amendment does not protect parties who refuse to pay taxes under the Income Tax Act from prosecution under tax-related acts. [6] This was the "America v. Sullivan case" that shocked the nation [7].
Two key figures in the U.S. v. Sullivan case, Assistant Attorney General Marbel Willebrant and Justice Oliver Holmes Jr. (Photo/Wikipedia)
Obviously, Willable Brandt's "golden idea" of "prosecuting gang members for tax-related crimes" will definitely not be for Sullivan's "little shrimp". After Sullivan's case, the Federal Ministry of Justice quickly embarked on a new campaign to prosecute gang members for tax-related crimes, and this time, their "prey" was Al Capone, who was "notorious from Ireland to Khitan and everyone knows.".
Probably in the entire history of mankind, there will be no more famous mafia than Al Capone. At that time, relying on the vicious means of "the offender, the offender kills everything", as well as the "good relations" with the mayor of New York City, Hal Thompson, and many senior officials of the major city police departments, Capone could still walk in New York and his "prostitute group" and "wine pond meat forest" after planning and even personally participating in countless street fires and even public murders.
In the 1920s, Al Capone was with John Sturgey, then The Chicago Police Department Chief. The relationship between Capone and Stegey is a historical mystery, and many people have concluded in the above two photos that Stege is Capone's ally, but some people have pointed out that Capone's attitude toward Stegey is ridicule and contempt, on the contrary, there is no convincing evidence that Stegey is Capone's "umbrella".
However, Al Capone, who was so arrogant, probably did not expect that the "iron fist of justice" that finally brought down him came from tax evasion.
Encouraged by the "United States v. Sullivan case", the Department of Justice and the IRS sent Frank Wilson, an economic crime expert and later former director of the Federal Secret Service, to investigate the Capone case and filed more than 5,000 criminal charges against Capone in one fell swoop.[8] Eventually, the runaway Capone was sentenced to eleven years in prison (and eventually died of syphilis) for evading $215,000 in taxes.
Interestingly, Capone and his lawyer argued endlessly with the court over which years they had evaded taxes and which had not, so much so that Judge James Wilkerson left Capone with the classic historical quote:
"It's time for someone to tell the defendant that bargaining with federal courts is completely impossible." [9]
Two key figures who convicted Al Capone, Frank Wilson and James Wilkeson (infographic/Wikipedia)
In fact, it was precisely because the indomitable Capone and his criminal empire collapsed because of tax evasion that the famous words of Benjamin Franklin, the founding father of the United States, to the effect that "only death and taxes are eternal" (the original phrase "but in this world nothing can be said to be certain, except death and taxes." ）。
However, despite the "classic counter-example" of Al Capone, the Italian gangsters still seem to have not eaten enough of the "iron fist" of tax-related crimes, and the "head" of the Gambino family, John Gotty, is prosecuted for tax evasion like the "old predecessors".
However, unlike Capone, When Gotty's case occurred in the 1980s, he was not as "lucky" as Capone, and tax evasion was only one of the many crimes that Gotty was indicted, and Gotty, who was "punished for several crimes at the same time", was eventually sentenced to life imprisonment and died in prison.
John Gotty (Infographic/Wikipedia)
Second, imprisonment, community service, high fines... A book of tax-related crimes and offences committed by global celebrities
In the 1920s and 1930s, many film companies, agencies, etc. also had more or less contact with gangsters, whether the identity of gangsters was bosses or friends. And seeing that the emperor of the criminal empire, Al Capone, was imprisoned for tax-related crimes, how could Hollywood artists not tremble because of tax payments.
Therefore, since the 1930s, unlike their Chinese counterparts, veteran Hollywood stars, especially those famous stars exposed under the spotlight, although they are often related to vicious crimes such as murder, rape, violent crime, and abuse, the vast majority of people have basically not had any major problems in taxation.
However, since the 1960s, probably because the deterrent power of the "Al Capone" case has gradually disappeared, Hollywood and the entire European and American entertainment industry seem to have paid less attention to tax issues than before, and tax-related crimes and violations have begun to "pick up" again.
Probably the most famous tax-related offender in Hollywood history is "Blade Warrior" Wesley Snipes.
In 2008, the black film star, who was no less senior than Denzel Washington or Will Smith, was charged with failing to file tax forms and pay taxes to the tax authorities during the golden period of his career from 1999 to 2004, when he had a total income of more than $37 million. Snipes eventually went to jail, and his former eminent identity no longer existed. [10]
"Blade Warrior" release photo (infographic/AP)
Another Hollywood celebrity who has gone to jail for tax issues is Sophia Rowland, a well-known Hollywood star in China.
In 1982, Sophia Rowland, who had been honestly paying taxes in the United States, was accused of tax arrears in her home country of Italy, and Sophia Rowland had to serve 17 days in prison. However, unlike the Blade Warrior, Sophia Roland insisted that she was innocent of this unpleasant experience and fought the case until 31 years later. In 2013, Italy's Supreme Court ruled that Roland had been given her innocence, and at that time (1974) she had no problem paying taxes. [11]
China has "Qiu Ju fights a lawsuit", Italy has "Roland fights a lawsuit"
In addition, two big-name singers are also in trouble because of tax issues.
Chuck Bailey, the "king of blues rock," was sentenced to four months in prison and 1,000 hours of community service for $110,000 in 1960s for tax evasion; Willie Wilson, the godfather of country music, was also accused of failing to pay taxes on an income of up to $16.7 million in the 1990s.
However, Willie Wilson's lawyers were clearly a little more sophisticated than Chuck Bailey's lawyers, and eventually entered into a "money-out-of-jail" defense deal with the federal government, and in order to pay the high taxes and fines, Willie Wilson had to work hard and write a new album in a very short period of time, which was named "IRS", and sold it, which paid the fine.
Willie Wilson's album "Iraisure: Who Will Buy My Memories" was created to pay off taxes and fines (Infographic/discogs.com)
In recent years, Nicolas Cage, who has become the "king of bad films" and dared to pick up a movie, is so "hard" not because he wants to "just suck money", but to repay the fine caused by the tax arrears.
Since 2009, Nicholas Cage has been investigated for tax arrears, and although he has not been sentenced to prison or community service, the tax authorities have still imposed hefty fines of more than $10 million. [12] In order to continue to be a "law-abiding citizen" without further punishment, even with 10,000 reluctances, Nicolas Cage had to be the "king of bad films".
"Cage, pay taxes!" (Infographic/TMZ)
Cage wasn't the only "Italian" to be fined heavily for tax arrears, the late tenor Pavarotti made the same mistakes over taxes, and in the end, Pavarotti and the Italian authorities agreed to pay back more than $12.5 million in arrears. [13]
In addition to Hollywood stars, some celebrities who have long served stars , whether legal or illegal , have also been "imprisoned" for tax-related crimes or violations.
Two of the designers of the "Dolce & Gabbana", Dominique Douca and Stéfano Banner, who had been boycotted by the Chinese people for insulting China, were fined more than US$441 million for tax evasion,[14] and in the end, After spending probably not much less than the fine, Dolce & Gabbana narrowly escaped the "disaster".
The famous "Hollywood bustard", Heidi Fresco, who has long provided organized prostitution services to Hollywood celebrities, was not so lucky, and she was sentenced to more than 3 years in prison for tax-related crimes alone. [15]
As for "Queen of Housekeeping", Martha Stewart, although she was not in jail for tax-related crimes, she still paid a $220,000 property tax to the authorities after being imprisoned for insider trading. [16]
III. A Brief Analysis of the Legal Consequences of China's Tax-related Crimes: Starting from existing cases in China's "entertainment industry"
Obviously, celebrities in Europe and the United States have been subjected to enough "iron fists" for tax-related crimes or violations of the law, but their Chinese counterparts do not seem to have a clear understanding of how serious the punishment can be for "tax arrears", or "tax evasion" in the original provisions of the Criminal Law of the People's Republic of China.
Article 201 of the Criminal Law of the People's Republic of China provides for the crime of tax evasion:
"Where a taxpayer makes false tax declarations or fails to make declarations by means of deception or concealment, and evades the payment of a relatively large amount of tax and accounts for more than 10 per cent of the tax payable, he shall be sentenced to fixed-term imprisonment of not more than three years or criminal detention and shall also be fined;
Where the withholding agent adopts the means listed in the preceding paragraph and fails to pay or underpays the withheld or collected taxes, and the amount is relatively large, it shall be punished in accordance with the provisions of the preceding paragraph. Where the acts mentioned in the preceding two paragraphs are repeatedly committed and are not dealt with, they shall be calculated on the basis of the cumulative amount.
Where there is an act mentioned in the first paragraph, after the taxation authority has issued a notice of recovery in accordance with law, the tax payable shall be paid in return, the late payment fee shall be paid, and the administrative punishment has already been imposed, criminal responsibility shall not be pursued; however, except for those who have received criminal punishment for evading the payment of taxes within five years or have been given two or more administrative punishments by the tax authorities. ”
China, like European and American countries, has adopted the provisions of "paying the tax payable, paying late payment fees, and those who have received administrative penalties shall not be investigated for criminal responsibility" for the crime of tax evasion.
China's stars and followers should not lack memories of tax-related crimes.
After all, I still remember my childhood, from movies to television, from advertisements to Hitachi, from my mother's mirror to my father's lighter, from my grandfather's radio to the "China Television News" that my grandmother read every day... At that time, Liu Xiaoqing and Mao Amin, who were everywhere in their lives at that time, were suspected of tax evasion (at that time, "tax evasion" was also called "tax evasion") or were detained by the public security organs, or because of the incident and the storm to avoid overseas "dormancy", the people in the streets and alleys heard the news.
However, in recent years, I don't know if it is because of a certain "internationally renowned actress" who has not been punished after the well-known tax-related events "N hundred million" in the tax-related events that have not been punished, so that many people in the entertainment industry have the illusion that "taxes can not be paid, I have not been found to earn, I have been found to make up for it, anyway, I will not suffer punishment". In this regard, the author gives the following precedents for the reference of entertainment industry people who have this idea.
Fan Bingbing posted on Weibo on April 30, and was accused of pointing to something (screenshot from his Sina Weibo)
In the (2018) Qiong 0108 Xingchu No. 267 "First Instance Criminal Judgment on the Case of Wang Dong's Tax Evasion", the defendant's total income from not reporting taxes in accordance with the law was about 8 million yuan ("of which 3 million yuan was obtained in February 2003 using 4 invoices, and the business tax and education fee surcharge were not declared and paid" "CCTV copyright transfer income was 5 million yuan, and the tax declaration obligation was not fulfilled in accordance with the regulations." ”）。 Although the defendant had no "previous conviction" and had voluntarily pleaded guilty and paid the full amount of the tax and late fees, he was eventually sentenced to one year and six months in prison, suspended for one year and seven months, and fined 60,000 yuan.
Therefore, if some of the Chinese counterparts of Hollywood stars believe that "there is no history of tax-related crimes or violations of the law, as long as they are paid back, there will be no criminal liability", I am afraid it is still too "taken for granted".
IV. Conclusion
As of press time, the Shanghai Municipal Taxation Department and the Beijing Municipal Radio and Television Department have sent letters to conduct a comprehensive and systematic investigation of the celebrity's "yin-yang contract" and possible tax issues.
The author is not an expert in criminal law, but it is still foreseeable that in the near future, some Chinese celebrities who "go their own way" on tax issues and do not pay attention to laws and regulations will swallow up the bitter fruit like their European and American counterparts.
In this regard, the author may wish to send Berman's famous quote that law students remember in advance to the "eager candidates" who are about to step into the entertainment industry or want to step into the entertainment industry and become "celebrities" but sneer at tax and compliance issues.
"The law must be believed, otherwise it will be useless."
Resources:
[1] Spanish star Fernando Torres paid €50 million for his transfer to Chelsea from Liverpool.
[2] Portugal star Cristiano Ronaldo paid €100 million on his move to Juventus from Real Madrid.
[3] British star Gareth Bale paid €100 million for his transfer to Real Madrid from Tottenham Hotspur.
[4] Belgian star Eden Hazard paid €115 million for his transfer to Real Madrid from Chelsea. In the two seasons since his transfer to Real Madrid (30 April 2021), Hazard has made 38 appearances in La Liga, the Champions League, the Copa del Rey and the Spanish Super Cup, scoring 4 goals. Eden Hazard data page: https://www.transfermarkt.com/eden-hazard/leistungsdaten/spieler/50202/plus/0?saison=2020
[5]15 F.2d 809 (1926) SULLIVAN v. UNITED STATES. No. 2507. Circuit Court of Appeals, Fourth Circuit. October 19, 1926.
[6] U.S. Supreme Court United States v. Sullivan, 274 U.S. 259 (1927) United States v. Sullivan No. 851.
Decided May 16, 1927
[7] Please do not associate this case with another well-known "Sullivan case," the New York Times Co. v. Sullivan, 376 U.S. 254 (1964)".
[8] Dennis Hoffman. Scarface Al and the Crime Crusaders: Chicago's Private War Against Capone. Southern Illinois University Press(2010). pp. 159–164.
[9] Douglas O. Linder. Al Capone Trial (1931): An Account, https://famous-trials.com/alcapone/1474-home.
[10] Simon Hattenstone. Wesley Snipes on art, excellence and life after prison: 'I hope I came out a better person'，https://www.theguardian.com/film/2020/nov/02/wesley-snipes-on-art-excellence-and-life-after-prison-i-hope-i-came-out-a-better-person.
[11] Robert W. Wood. Sophia Loren Jailed In 1974 Tax Evasion, Finally Wins Case, https://www.forbes.com/sites/robertwood/2013/10/24/sophia-loren-jailed-in-1974-tax-evasion-finally-wins-case/?sh=298d3d0c69e7.
[12] TMZ. NIC CAGE Six Million More Tax Problems，https://www.tmz.com/2010/01/16/nic-cage-tax-irs-lien-bankrupt/.
[13] MTV News. PAVAROTTI AGREES TO $12.5 MILLION SETTLEMENT OF TAX EVASION CASE, http://www.mtv.com/news/1122532/pavarotti-agrees-to-125-million-settlement-of-tax-evasion-case/.
[14] Reuters. Dolce and Gabbana fined $441 million for tax evasion，https://www.reuters.com/article/us-dolcegabbana-tax-fine-idUSBRE9310RW20130402.
[15] Jeff WONG. Heidi Fleiss sentenced to 37 months in prison in tax case，https://apnews.com/article/fbc3fcc7e5b26861b556e0d4955a562f.
[16] FCG. Even Martha Stewart Couldn’t Craft A Way Out of Paying Taxes，https://www.financialclaritygroup.com/278/
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