Taxable Talk

Richard Hatch’s fate now lies with a jury in Providence, RI.

Hatch, the former Survivor winner is either a greedy man who didn’t want to pay the taxes he owed or he did the best he could to understand the tax code.

Unfortunately for Hatch, his accountants did tell him about the taxes he owed, according to testimony during his trial. One even made him sign a statement that he wouldn’t file a return that didn’t include his Survivor winnings. He promptly filed that return.

Hatch faces up to 73 years in prison and millions in fines if convicted. Jury deliberations resume Wednesday morning.

News Story: AP via the Boston Globe

The trial of former Survivor winner Richard Hatch on ten counts including tax evasion continues in Providence, RI. Today’s New York Times has an excellent story on the trial, including reactions from some of his fellow contestants.

Hatch, who took the stand in his own defense on Friday, will return to the stand on Monday. Hatch claims that the producers of Survivor agreed to pay his taxes. However, his Form 1099 does not indicate this. Hatch faces up to 73 years in prison if convicted on all counts.

Richard Hatch, the Survivor winner who allegedly elected to stiff the IRS, faces a January 10th trial date in Providence, Rhode Island on ten counts of tax evasion, filing a false income tax return, wire fraud, bank fraud, and mail fraud. Yesterday Hatch lost three motions, where he attempted to have his case continued (postponed), some charges separated, and to force the IRS to disclose how much in taxes he allegedly owes.

For those who don’t remember, early in 2005 Hatch agreed to a plea agreement but then he backed out of it. The plea agreement Hatch rejected would have had him pay his tax, plus interest and penalties, and have him serve two years in prison. Hatch now faces up to 73 years in prison, and fines of over $1 million. Hatch won exactly $1 million in CBS’ first Survivor show.

Where are those immunity cards when you need them?

News Story: The Providence Journal

Survivor Richard Hatch pled not guilty today to charges that he didn’t report his $1 million in winnings from the reality television show, and charges of filing a false S-corporation tax return, mail fraud, wire fraud, and bank fraud. Hatch told the Providence Journal that, “I’ve always, always, always paid my taxes and always will.”

However, the government alleges that he didn’t. The allegations include that Hatch shopped around for the tax return that had him pay as little as possible to the government. The Journal says that he visited two accountants. The first prepared a return where he would have owed over $400,000 to the IRS; the second prepared a return where he would have paid over $200,000 to the IRS. Both of these returns included the income from Survivor. Neither return was filed. The second accountant then prepared a return that did not include the Survivor income; it showed Hatch receiving a refund from the IRS of $4,483. The accountant noted that it was for informational purposes only and should not be filed. Hatch filed that return.

Hatch is free on $50,000 bond until his trial.

News story (Providence Journal)
The indictment

Richard Hatch, the winner of the first Survivor television show, was indicted on ten counts of tax evasion and bank fraud. While his attorney calls the indictment “a publicity scheme,” Hatch could end up paying fines of over $1 million and spending 73 years in jail if convicted on all counts.

Hatch is accused of not reporting his $1 million in winnings and that he pocketed $36,500 in donations to his foundation. Earlier this year Hatch had made a plea agreement with the government but he backed out of the deal.

News Story: Reuters

When we last left Richard Hatch, the $1 million winner from Survivor who didn’t pay his income taxes, he withdrew his plea of guilty. He now claims, in an interview with AP, that CBS should have withheld his taxes because under California law he should have been classified as an employee.

Ignoring, for the moment, the merits of his claim, ignorance of withholding does not alleviate one’s responsiblity for paying income tax. Penalties, however, could be eliminated depending on the truth of Mr. Hatch’s claim.

What will add to the confusion during trial (if this goes to trial) is that Mr. Hatch is a resident of Rhode Island. CBS (now part of Viacom) is headquartered outside of California. Survivor was filmed in the South Pacific. Frankly, Mr. Hatch is probably going to be forking over the ~$300,000 the government says he owes, along with interest. After all, there were only 300 million witnesses to his winning the $1 million…

While I was on the East Coast, Richard Hatch backed off from pleading guilty to tax fraud. Hatch, who won $1 million on Survivor, allegedly did not declare his prize on his tax return. The government has dismissed the charges, and will present all possible charges to a grand jury.

We’ll keep you informed.