“Yes, it’s me,” she said. “Is it really you, Matt?”
“Yeah,” he said, his voice sounding meek and very un-Matt-like. “It’s me. And I’m not calling collect either. National will pay for the charges. Could you do me a favor and accept the call? I really need to talk some shit with you.”
Interesting, she thought. “Uh ... sure, I’ll accept the call.”
“Thank you,” the operator said and then clicked off the line.
“What’s up, Matt?” Pauline asked. “I was under the impression that I was part of the ‘never’ you laid down when you left Intemperance.”
“You were,” he said with a sigh. “But even though I hold you partially responsible for Darren’s death and I vowed to never speak with you or do business with you again, I never lost respect for you and your ability as a manager and a lawyer, you dig?”
“I dig,” she said. “And I think I might be flattered by your words, but I haven’t had time to fully analyze them yet. So ... what’s the deal? What kind of help do you need?”
“I need a good tax lawyer,” he said. “Do you know any?”
“As a matter of fact, I do,” she said. “What’s the issue? Are you in tax trouble?”
“My fuckin’ accountant says I’m not,” he said, “but he’s about as trustworthy as Slick Willie in a fuckin’ Catholic girls school.”
“A good analogy,” she said. “Why don’t you give me a brief on what’s going on?”
He gave her a summary of the situation, using the word ‘fuck’ or one of its derivatives eleven times, the word ‘shit’ six, and the word ‘schlong’ twice. Pauline listened with growing alarm and disbelief as she heard the tale.
“You’re saying that you have paid no taxes whatsoever on any of your solo artist revenue for the past four years?” she asked incredulously.
“That’s right,” he confirmed. “Hopple told me that since I own a house in Mexico, I can claim I don’t live in the United States.”
“That wouldn’t matter even if it were true,” Pauline told him. “At least not on the federal level. You might be able to get away with that for California, but in order to pull that off with the IRS you would have to renounce your American citizenship and prove to them that you actually do live in Mexico the majority of the time.”
“Hmmm,” Matt grunted. “Are you sure about that shit?”
“Absolutely sure,” she assured him. “And I find it really hard to believe your accountant doesn’t know that.”
“You’re saying that he’s running some kind of scam?” he asked.
“I don’t know where he’s coming from with this,” she said. “Is he doing something malicious or is he just an idiot? I don’t know. You know him, I don’t.”
“It could be either one,” Matt said, sighing again. “Maybe a little of both.”
“I think you are definitely going to need a good tax attorney, Matt,” she said. “At least he was right about that. I see big trouble coming your way. Expensive trouble.”
“But the feds aren’t auditing me,” he said. “Just California. Didn’t you just say I could get away with the whole Mexico thing in California?”
“I said it was possible,” she corrected. “You at least have an argument to make. In order for them to buy it, however, you’re going to have to prove to them that you live the majority of the time outside of California. Do you have the ability to do that?”
“I don’t know,” he said. “I guess that’s something to talk to the tax lawyer about, right?”
“Yes, most definitely,” she said. “Even so, I would be prepared to pay all of your back taxes for the past four years to the franchise tax board. That will be a significant amount of money.”
“Well, at least it’s only California,” he said with a sigh.
“It is not just California,” Pauline warned. “The feds are going to come after you too. Don’t think for a moment they won’t.”
“What do you mean?” he asked carefully.
“State tax boards are required by federal law to report income discrepancies to the IRS if they uncover them. As soon as they finish your audit, as soon as they have documentation of four years of unreported income, they are going to forward it to the IRS. And, since you have not renounced your American citizenship, you have no argument to make that you don’t owe taxes on that income. They are going to hit you with all the back taxes and then charge you an assload of penalties on top of it. If you’re pulling in what I suspect you’re pulling in, we’re talking tens of millions of dollars here, Matt. Literally tens of millions. And they will do anything to make sure they get that money. They’ll seize your disposable assets and sell them. They’ll put liens on your property. They’ll garnish your royalty checks. You are in a whole lot of trouble here.”
There was silence on the phone for a few moments and then Matt summed up the situation in three words. “What a rip.”
Pauline hooked Matt up with Wesley Brimm of Brackford, Redman, and Jackson, the same firm that Celia used for her divorce lawyer and the same attorney that Pauline used for KVA taxation issues. He was a stuffed suit if ever there was one, an obnoxious, condescending, cocky piece of shit that Pauline sometimes suspected just might have a few severed heads in his freezer, but a top-notch expert on California and federal tax laws and tax procedures. He accepted Matt’s notarized contract and immediately went to work trying to gather information. He, like Pauline, was absolutely astounded that a licensed CPA would actually promote the idea that someone could claim that owning a house in Mexico relieved that person of the burden of paying federal and state income taxes.
Brimm ran into problems immediately in his quest for documentation. He could not get hold of Hopple in order to interview him and look over the files. He called six times a day, both at the office and on Hopple’s cell phone (the number for which he had obtained by nefarious means he elected not to discuss). At the former, he only got the receptionist who repeatedly claimed that Mr. Hopple was not in and that she did not know how to reach him. At the latter, he got nothing but a recorded voice telling him the cellular customer he was trying to reach was not available.
Meanwhile, a Los Angeles county superior court judge granted the California State Franchise Tax Board their requested subpoena for examination of payments made to one Matthew Norman Tisdale by their revenue distribution department for the past five years. Those documents were copied and released on June 3 and showed that National Records had paid Matthew Tisdale a grand total of $51,342,917 in royalties and touring income over the past five years, of which only $9,658,314 had been declared and properly taxed. That meant that Matt, if found not to primarily reside outside of the state of California, would owe 13.3 percent of that undeclared $41,684,603, which amounted to $5,418,998. And that was just the base amount he would owe. Penalties and interest would be tacked on as well, probably at least another half a million worth. And that was only the state of California. The federal tax rate on that $41.7 million would be close to forty percent, not including penalties and interest.
“This is a really bad situation, Matt,” Brimm advised the guitarist the night after the third and final show in Amsterdam. “I think you should start preparing yourself for the worst.”
“What’s the worst?” Matt asked.
“That you’re going to owe the state and the feds around thirty-two million dollars by the end of this year.”
“But I don’t fuckin’ have thirty-two million dollars!” Matt complained. “Most of that I already spent on my fuckin’ yacht and my house and the helicopter that goes with the yacht and the crew who fuckin’ drives the thing and keeps it up for me.”