The music legend reportedly owes the IRS $10 million.
Her attorney, Daniel Stolz, explained to Rolling Stone that, “Ms. Warwick had a business manager who mismanaged her affairs ... 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.”
Reportedly, Warwick has paid close to $1.3 million in attempts to reach an agreement with the IRS on a $10 million debt.
Stolz said the agency is treating Warwick like a celebrity rather than taking into account her actual “capacity to pay.” On her bankruptcy petition, her monthly income is listed at around $20,950.00 with $20,940.00 in expenses (read: net income = $10.00/month).
Despite the stress, Warwick remains ever passionate about her career. Via a personal message on her site (dated Mar. 7), she wrote, "I will be working on a new recording project that I am very excited about and will let you know more about it once we get started."
And she continues to perform around the world, including at a benefit for the Count Basie Theater in her home state of New Jersey.
Still, it’s not enough to pay for a "mushrooming" tax lien. Stolz is arguing that "the taxes are of an age where, under the bankruptcy code, they're dischargeable taxes."
The obvious downside to filing is that it can affect her credit score. It will, however, protect most of her assets, including a pension she’s collected as a member of the SAG-AFTRA labor union.
Warwick celebrated 50 years in the music business last year with the release of her album Now.
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(Photo: Bryan Bedder/Getty Images for BET)