Following tax charges, the first winner of CBS’s reality show Survivor says he’s broke. If he can’t survive an IRS audit and tax prosecution, who can?
By Steven N. Klitzner
Richard Hatch.
You might remember the name. He was the winner of the first season of CBS’s hit reality show Survivor.
And he had a very distinct style of play: He became notorious for walking around naked.
He was accused of being cocky and evil. Another contestant referred to him as a snake.
But on that first season of Survivor, Hatch walked away as the winner.
And with $1 million in prize money in his pocket.
Happy ending, right?
That’s where you’re wrong. Hatch is currently in federal prison in West Virginia.
No, he didn’t commit a violent crime. And, no, he wasn’t part of any sort of fraud. Hatch is in prison on tax charges. Today, as a result of those tax charges, Hatch says he’s “destitute.”
It all goes back to January 2005, when the U.S. Attorney’s Office in Rhode Island indicted Hatch on tax charges, alleging he failed to report his $1 million in Survivor winnings and $321,000 he received from appearances on a Boston radio station. One later year, a jury found Hatch guilty.
The Survivor winner was released from prison in 2009, but his battle with the IRS continued. In 2011, Hatch was sent back to prison for violating one of the terms of his release – to pay taxes on his $1 million in winnings from his appearance on the CBS reality show.
Now saying he’s broke, Hatch has asked the court to provide him with a lawyer to help with the appeal. He also says he has evidence that he owes taxes to the government of Malaysia, where the reality television show was filmed 10 years ago, not to the U.S. government.
The irony in all this? That the man who survived what amounts to America’s most physically and mentally challenging game show hasn’t been able to “survive” the challenge of an IRS audit and federal tax prosecution.
And Hatch isn’t alone. The IRS is aggressively pursuing possible tax cheats, whether they’re reality TV stars or Average Joes.
Last year, the IRS audited 1.11 percent of all returns — an 11 percent increase over last year.
The IRS is also taking a page from Google’s playbook: The agency is using analytics. While Google uses these formulas to determine webpage rankings, the IRS is using them to identify tax returns that warrant scrutiny from IRS officials.
That means, just as the number of IRS audits is increasing, the IRS’s efficiency in identifying returns most likely to result in successful audits is also increasing.
It’s a bad combination for tax cheats.
Or, for that matter, anyone hoping to “survive” an IRS audit.
Steven N. Klitzner is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers, and an Aventura attorney. You can contact him at 305-682-1118 to obtain a free subscription to his newsletter titled The IRS Times & Inquirer.
