Action hero meets his nemesis - the tax man

By Guy Adams

Like many an action hero, Nicolas Cage is a dab hand at saving the world, getting the girl, and disarming a baddie with a single karate chop. But filling in a tax return is a different matter.

The Oscar-winning actor has been forced to pay US$666,000 ($999,899) in back taxes and penalties to the Internal Revenue Service, after it was revealed he had improperly deducted millions of dollars in personal expenses from his professional income.

In a settlement laying bare the perks of a Hollywood star's private life, Cage was accused of wrongly writing off $3.3m that was actually used to maintain his opulent lifestyle between 2002 and 2004.

Among the day-to-day necessities he'd claimed as legitimate business expenses were private limousine rides, meals, gifts, first-class travel, and the maintenance of a personal Gulfstream 1159A turbojet.

In a single year, "household help" at Cage's homes around the world cost $185,000.

He keeps properties in Los Angeles, the Bahamas, Rhode Island, and Midford Castle, near Bath.

The actor, who plays a jaded hitman in his new film Bangkok Dangerous, also claimed another sizeable chunk for the upkeep of his private aeroplane.

His fluctuating salary was also a source of dispute.

In 2003, Cage reported just $430,000 in taxable income (the IRS claimed it was actually $1.9m) while in 2004, the year he starred in National Treasure, he admitted making $17m (the IRS thought the figure was nearer $18.5m).

Cage's financial affairs first made headlines in February, when the tax dispute emerged in court papers citing his real name Nicolas Coppola.

At the time, his business manager, Samuel J Levin, said that deducting the cost of food, domestic staff and travel from declared earnings was "customary in the entertainment industry" and necessary to finance Cage's "security needs".

US law says otherwise and details of the settlement emerged this week.

However, although Cage's spokesman has not responded to further requests for comment, the $666,000 bill he must now pay is substantially less than the $1m the IRS originally sought.

A note on the US tax court's internet site revealed that 20 per cent of the sum was a "penalty fee", but made clear that the IRS considered the matter a case of non-criminal negligence, rather than something more serious.

Where that now leaves Cage's finances is anyone's guess.

Although the magazine Forbes recently ranked the actor 49th in its annual Celebrity 100 list (claiming his income for the past 12 months was $38m), a good portion of his fortune is tied up in Bangkok Dangerous.

The film, which Cage produced as well as starred in, received unflattering reviews last week.

Although it topped the box-office charts, its takings of $7.7m were well below industry estimates.

In a move that may yet generate some ready cash, it emerged this week that Cage was "downsizing" his Los Angeles home.

The property section of the Los Angeles Times reported that he'd put the 11,000 sq ft mock-Tudor mansion in Bel Air on the market for $29m, and was moving into a smaller, leased flat.

The house Cage is selling was once owned by Dean Martin, boasts nine bedrooms and nine bathrooms and sits on an acre of land with an Olympic-size pool and a 35-seat home theatre.


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