Ruben Studdard's Taxes Go Off-Key

2003 American Idol champion Ruben Studdard faces liens in regard to nearly $200,000 in regard to tax deficiencies with the IRS and the state of Alabama. Most of the tax deficiency resulted from a recording contract (valued at $1,000,000) for winning the popular Fox reality show. The liens place at risk a nightclub Studdard plans to open in his hometown of Birmingham. In a related development, Australian tax authorities are now scruntinizing Paul Hogan's tax returns (see link at

Aussie Authorities

).

This sad story indicates that reality shows should provide tax advice to winners (and in the case of American Idol, even a number of runner-ups). The change in earnings frequently is dramatic and the contestant often is unaware of the tax implications.