How EA’s Jet-Setting Founder Avoided $26 Million in Taxes
Hawkins did eventually pay more than $10 million toward his tax debt, but $26 million still remained. Because of Hawkins’ continued high spending, a federal bankruptcy court refused to give him the usual bankruptcy benefit of wiping his tax burden.
But Hawkins appealed this ruling—and he doesn’t have to pay those taxes, at least not for now. A recent decision [PDF] by a three-judge panel for the 9th US Circuit Court of Appeals in San Francisco sided 2-1 with Hawkins despite objections from a dissenting appellate judge who said that Hawkins didn’t deserve a break because he was engaged in “profligate spending.”
The appeals court concluded that it didn’t matter whether Hawkins bought a private jet or lived the high life, so long as he wasn’t willfully scheming to evade his tax burden. The majority opinion concluded [PDF] that the law was on Hawkins’ side and that “bankruptcy law must apply equally to rich and poor alike.”
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