Dionne Warwick Bankruptcy Blamed on Taxes, Bad Management

Image: Dionne Warwick Bankruptcy Blamed on Taxes, Bad Management

Tuesday, 26 Mar 2013 09:48 AM

By Alexandra Ward

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Dionne Warwick, the 72-year-old Grammy Award-winning singer, has filed for bankruptcy in New Jersey, citing financial mismanagement, according to NBC News.

Warwick, 72, filed the petition March 21 in U.S. Bankruptcy Court in her home state of New Jersey, listing her total assets at $25,500 and total liabilities at more than $10.7 million. Nearly all of the tax claims were by the Internal Revenue Service and the state of California, according to the filing.

The IRS and California tax claims total more than $10.2 million, mostly from the 1990s, according to the petition, which listed Warwick's average monthly income as $20,950 and expenses at $20,940.

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The personal bankruptcy filing is attributed to "negligent and gross financial mismanagement" in the late 1980s through mid-1990s, according to Kevin Sasaki, Warwick's publicist. Sasaki claims Warwick paid all back taxes but penalties and interest have continued to accrue.

"In light of the magnitude of her tax liabilities, Warwick has repeatedly attempted to offer re-payment plans and proposals to the IRS and the California Franchise Tax Board for taxes owed," Sasaki said in a statement. "These plans were not accepted, resulting in escalating interest and penalties."

Daniel Stolz, Warwick's attorney, said the trouble began with an inept business manager.

"Ms. Warwick had a business manager who mismanaged her affairs," Stolz told Rolling Stone. "Before she knew it, she owed a gazillion dollars in taxes. She's actually paid more than the face amount of the taxes, but with all of the crazy interest and penalties that they add, the number kept mushrooming — even though she paid off the amount that she owed in terms of the actual taxes."

Editor's Note: The IRS’ Worst Nightmare — How to Pay Zero Taxes

Warwick, Whitney Houston's cousin, is a five-time Grammy winner best known for her songs "I'll Never Fall in Love Again," "Walk on By," and "Do You Know the Way to San Jose?"

Related stories:

Stars Mourn Whitney Houston at Hometown Service

Stars Line Up to Perform at Whitney Houston's Funeral

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