Remember kids, working tirelessly to protect your musical legacy — while admirable — is no excuse for failing to pay your taxes.
House Republicans proposed a “small business” bill, that would benefit corporations earning over $1,000,000 more than sole proprietorships. Senate Democrats countered with yet another bonus depreciation/payroll tax credit temporary patch. A frustrated nation shrugged its collective shoulders and went back to watching “Hoarders.”
Ah…”Rappers Delight.” When those first base notes give way to the familiar “I said a hip hop…” it hearkens back to a bygone era, when rap was simple and pure. Back then, shock value wasn’t important; you didn’t have to rap about slaughtering cops and slinging dope to sell records. As long as it was done over a solid base line, you could write ridiculously harmless lyrics like these, and people would still dig it.
So after school I take a dip in the pool,
Which is really on the wall,
I got a color TV, so I can see
The Knicks play basketball.
Things have evolved, obviously. The turning point came in 1988, when NWA released “Straight Outta’ Compton” and changed the game forever. Rap got angry. And violent. And yes; really, really good.
But as aggressive as the genre became, at least it was — for the most part — false bravado. Those guys bragging about pimpin’ and drive-bys weren’t actually criminals (well, except for Slick Rick).
Now today’s rappers…these guys are terrifying. If you’re not an ex-con, shoot-out survivor, or a little white guy from Detroit, you’ve got virtually no chance of being taken seriously.
But I digress. The point is, while rap has undergone a staggering metamorphosis in the past three decades, one element of the industry has remained constant from old school through today: rappers hate paying taxes.
That hatred can now be traced all the way back to rap’s genesis, as the three brothers who started Sugar Hill Records — the trailblazing rap label that gave birth to the aforementioned “Rapper’s Delight,” the genre’s first Top 40 hit — are currently in a heap of hot water with the IRS. From Bloomberg:
Leland, Rhondo and Joseph Robinson Jr. admitted today in federal court in Newark, New Jersey, that they didn’t file returns from 2005 to 2008 that would have declared royalties from their ownership of Sugar Hill Music. The brothers failed to pay $1.28 million in taxes and also owe interest and penalties. Each pleaded to two misdemeanor counts covering a different tax year and also admitted to related conduct for failing to file in two other years. They face a year in prison on each count.
That’s right. If things go wrong, it’s not a ho-tel, mo-tel, or Holiday Inn the Robinson brothers will be residing in, but prison. But don’t fret for the Sugar Hill Gang too much, as their attorney, Henry Klingeman, has an air-tight alibi for his clients’ noncompliance:
“They’ve been concentrating on protecting their current musical legacy instead of fulfilling their tax obligations,” he said.
Whew…glad we’ve cleared that up. Carry on, gentlemen.
To the Robinson brothers’ credit, they’ve remained optimistic throughout their recent fiscal ordeal, as evidenced by this statement released through their attorney:
A Skiddleebebop, we rock, Scooby Doo,
And guess what, America, we love you
‘Cause you rocked and a rolled with so much soul,
You could rock ’til a hundred and one years old.
I don’t mean to brag, I don’t mean to boast,
But we like hot butter on our breakfast toast!
I have no idea what that means, but I’ll be damned if it’s not provocative.
The items in this blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. Tony Nitti writes Double Taxation, and any opinions expressed or implied are not necessarily shared by anyone else at WithumSmith+Brown.
Tony Nitti is a Tax Partner in WS+B’s National Tax Service Group and the founding father of the firm’s Aspen, CO office. He is a CPA licensed in Colorado and New Jersey, and holds a Masters in Taxation from the University of Denver. He specializes in corporate and partnership taxation, with an emphasis on complex mergers and acquisitions structuring. He recently co-authored CCH's "CCH Expert Treatise Library: Corporations Filing Consolidated Returns" to be published on February 29, 2012.
In his free time, Tony enjoys driving around in a van with his dog, solving mysteries. He has been known to finish the New York Times Sunday crossword puzzle in under 7 minutes, only to go back and do it again using only synonyms. He invented wool, but is so modest he allows sheep to take the credit. Dabbling in the culinary arts, Tony has won every Chili Cook-Off he’s ever entered, and several he hasn’t. Lastly, and perhaps most notably, Tony once sang the national anthem at a World Series baseball game, though he was not in the vicinity of the microphone at the time.
