Pop-soul legend Dionne Warwick filed for Chapter Seven bankruptcy at the end of March in order to put an end to a serious dispute with the IRS.
Her attorney, Daniel Stolz, explained to Rolling Stone that, “Ms. Warwick had a business manager who mismanaged her affairs… She’s actually paid more than the face amount of the taxes, but with all of the crazy interest and penalties that they add, the number kept mushrooming – even though she paid off the amount that she owed in terms of the actual taxes.”
Dionne has paid close to $1.3 million in attempts to reach an agreement with the IRS on a $10 million debt.
Stolz alleges the agency is treating Warwick like a celebrity rather than taking into account her actual capacity to pay. On her bankruptcy petition, her monthly income is listed at around $20,950 with $20,940 in expenses – leaving her with $10.
Warwick, however, remains committed to her career.
Via a personal message on her website on March 7 she wrote, “I will be working on a new recording project that I am very excited about and will let you know more about it once we get started.”
Dionne continues to perform around the world, but it’s not enough to pay for a “mushrooming” tax lien. Stolz is arguing that “the taxes are of an age where, under the bankruptcy code, they’re dischargeable taxes.”
Filing for bankruptcy will protect most of her assets, including a pension she’s collected as a member of the SAG-AFTRA labor union.