Tax Trouble for Wayne Newton

Crooner disputes IRS claim that he owes $1.8 million in taxes and penalties

By Sarah Hall Aug 03, 2005 11:10 PMTags

Mr. Las Vegas is ready to take a gamble that the Internal Revenue Service has made a costly mistake.

Wayne Newton has filed court documents disputing IRS claims that he and his wife, Kathleen, owe more than $1.8 million in taxes and penalties from 1997 to 2000.

In fact, the crooner believes that Uncle Sam should actually be cutting him a check, rather than the other way around.

"We believe the IRS owes him money," Newton's lawyer, Lavar Taylor, told reporters Tuesday. Taylor said that Newton was entitled to $2.2 million in unclaimed tax deductions over the same time period.

Among other claims, the IRS' April 13 notice of deficiency accused Newton and his wife of failing to report the sale of an Arabian horse for $200,000 in 2000, incorrectly claiming more than $50,000 in losses on the sales of two antique cars the same year and reporting personal and family expenses as business expenses in 1997 and 1998.

Newton and his wife issued a statement in Las Vegas claiming they had relied upon the advice of their tax attorneys and accountants and filed accordingly.

"We have paid millions of dollars in taxes, so obviously it is not a matter of money but a matter of principle," they said.

Newton filed his 32-page response July 6 in tax court in Washington, D.C. The government has until next month to respond.

It's not the first time Newton has run into trouble with the taxman.

The "Danke Schoen" singer previously filed for Chapter 11 bankruptcy protection in 1992 to reorganize approximately $20 million in debts, including a $341,000 IRS lien for back taxes.

Newton is scheduled to perform a series of shows at the Las Vegas Hilton later this month.

Last spring, the showman hosted The Entertainer, a 10-episode E! Entertainment reality series designed to discover the next Las Vegas headliner. (E! Online is a division of E! Entertainment Networks.)

Newton eventually crowned New York-based singer Delisco the winner of a million-dollar contract and a spot in his Las Vegas extravaganza.