Girls Gone Wild owner Joe Francis, may be facing bankruptcy after the IRS placed a lien against him for $34 million and seized his bank accounts worth approximately $100 million. The IRS claims that Joe Francis has failed to pay taxes for 2001, 2002 and 2003; but the Girls Gone Wild owner claims that he owes the IRS nothing. The tax lien came just weeks after Francis agreed to a plea deal to escape jail in his federal tax evasion case.
The controversial celebrity is also facing lawsuits for failing to repay gambling debt and allegedly trying to embezzle money from three former employees. So went wrong? If it’s true that Joe Francis owes $34 million in back taxes dating back to 2001 and there is no fraud involved, he probably made the mistake that many others make, ignoring an obvious financial problem. Many debtors who are struggling financially delay paying their taxes, especially if they are unemployed for a couple of years. While this may appear to be the best solution in the short-term, it is a solution that will not work without the compliance of the IRS.
If you owe back taxes and are unable to pay, you need to contact the IRS and let them know the situation. The IRS may be willing to place you in uncollectible status while you sort out your finances. However, if you fail to notify them of your circumstances and fail to pay you could face tax liens, levies and bank account seizures. Assuming that there was not fraud (i.e. tax evasion) involved, Francis may have been able to include his tax debt in a Chapter 11 bankruptcy filing if he had moved quickly. Even if he was unable to discharge the IRS debt, he might have been allowed to discharge it partially and repay the balance under reasonable terms depending on the circumstances of his bankruptcy case.