Earlier today USA Today reported that Lindsey Vonn owed $1.7 million in back taxes to the IRS for the tax year 2010. The situation doesn’t spell disaster for the skiing star, that is if she takes care of her debt. If Lindsey fails to meet her tax obligations, the IRS would start garnishing wages from her accounts long before she could possibly face jail time. A spokesman of Lindsey’s, claims she has begun settling her debt.
A status update on Lindsey’s facebook page, stated “I am disappointed with this situation. I just recently became aware of the outstanding balance and I have done everything in my power to settle it immediately. The money owed was for the 2010 tax year, which was filed on time, and it has been paid in full. This is an important lesson for me. Not being in control of my finances and relying on someone else who you believed had your best interest at heart was a mistake and one I will not make twice.” First thing this suggests is that Lindsey is in the market for a new accountant and tax attorney, that is if they were the ones responsible for submitting payment on behalf of Lindsey to the IRS. It also suggests that her business manager dropped the ball on monitoring her finances. This miss-step could of caused her to owe more to the IRS than when she initially filed her 2010 taxes. Interest accrues on an open balance at a rate of 0.5% per month. If the IRS filed a notice of intent to levy against Lindsey, the interest rate would increase to 1% per month. At most any individual could accrue on their outstanding debt is 25% of the balance. A head or two should roll in her camp for this over sight.
But what does this all mean for the brand image of Lindsey Vonn? Well in all honesty, it shouldn’t cause a great deal of harm to Lindsey’s brand image. Big deal Lindsey is slow to pay her debts, it has no effect on the public. Luckily, almost all of the public doesn’t do business with Lindsey, so we won’t be waiting for our payments from Lindsey while she pays off her huge debt. And it is not as if she defrauded the U.S. government and is unwilling to pay her taxes like Wesley Snipes. Currently there are no investigations by the IRS into the claims on her tax returns, so she is living up to her duties as a law abiding U.S. citizen. Most Americans have been late on a payment of some sort, so it is hard to chastise Lindsey. So it is safe to say that Lindsey’s brand image is not suffering from this. If anything she gains! She is getting media exposure in the off season and a non-Olympic year. Lindsey’s going through a rough patch now, between this and her divorce. Plus everyone rather not pay taxes. So the public has an easy time empathizing with her. This is evident from all the out cries of support on her facebook page. Her brand image will remain intact despite all the media frenzy.
What is interesting about this most of all; is it allows for an opportunity to better estimate what Lindsey made in income the year of her Olympic Gold. In 2010, an individual owed 35% of their income to the IRS if they earned $373,650 or more. This was the highest tax bracket for that year. Based on this and her debt; her approximate earnings for the year, assuming all her income was from her endorsements, her household income was approximately $4.85 million. If she had income from investments or put money into IRAs she could have earned a great deal more, since the earnings from these are either taxed below regular income rates or are tax free.
There are two things that we all should take a way from this. One that we all should head our responsibilities. Two Lindsey is good looking, single and making a lot of money! So get out there and ask her out on a date!