Barbie's tax woes
I finally saw the famous box office blockbuster Barbie. Also this movie is not without its tax story. The film says that Barbie's author, Ruth Handler, was involved in tax evasion. Is that true?
Mattel executive until the IRS caught her...
That's what the film says, but was it really true? Not exactly. In real life, Ruth Handler, the author of Barbie and founder and CEO of Mattel, was convicted in the 1970s of twice inflating the company's sales figures to the SEC (Securities and Exchange Commission) in order to artificially inflate Mattel's share price.
Problems with tax evasion..
The film also says she had 'tax evasion issues'. If it is mentioned even twice in the film, I still have to dig deeper. However, her biography does not mention any other significant offences. Therefore, commentators have concluded that the benefit (most likely a capital gain) from the artificially inflated share price was taxable. Logically, in order to conceal the underlying crime, no one declares and pays tax on such taxable income. Therefore, quite often, financial (white collar) crime is accompanied by tax crime, which can lead to additional penalties.
"Those who hide income obtained from fraud will face the same consequences as those who try to avoid tax liabilities from legitimate sources of income." said a US Department of Justice (DOJ) statement published a few months ago in a financial crime case. Each tax evasion offence can be punished by up to 5 years imprisonment, the statement said.
I recently saw something like this here...
We, mortals here are trying to pay our taxes. On the other hand, the former leading officer at the SRS (tax authorities in Latvia), Mr Vaskevics, did it elegantly and simply - a third party set up an offshore company, got a credit card for it and simply gave it to Mr Vaskevics to use... This final verdict of the Senate (Supreme court) was quietly reported by the prosecutor's office a few days ago.
"From the description of the proven criminal offence, it appears that the accused V. Vaskevics, using credit cards issued to him and paying for various purchases, obtained income in a large amount from offshore companies."
I wonder if taxes were also recovered from Vaskevics? From the press release looks unlikely. As long as the prosecutors remain silent about this, all we can do is sing the once-famous song about Barbie..
I'm a Barbie girl, in the Barbie world
Life in plastic, it's fantastic
You can brush my hair, undress me everywhere
Imagination, life is your creation..