Rap artist Cornell Haynes Jr., known as Nelly, faces tax problems with the Internal Revenue Service (IRS). Nelly has been given about a 2.4 million dollar federal tax lien for 2013, according to insiders from TMZ. He is at risk to lose his other properties and all his assets if he does not pay up.
For those unfamiliar with the tax system, a tax lien is used to protect the government from seizing property and assets. There are many steps prior to the government taking over Nelly’s property. Now that the lien is filed, the IRS must be patient and see if Nelly complies and pays the debt, either in full or in payment plans. If he does not comply, then the IRS can file a Notice of Federal Tax Lien, making his property and assets “up for grabs” so to speak. This in turn will affect his credit and threaten his chance of acquiring more property. At that point, even if he sells his assets, he will need to surrender that income to the IRS. Considering the worst-case scenario, even if Nelly files for bankruptcy, the tax lien will still be in affect. As long as Nelly has a tax lien and not a tax levy, he still has time to work with the IRS and pay his dues before the government actively takes action to seize his property.
Nelly has a successful career with his 2013 album selling over 10 million copies. Although he has not been active in the music industry, he continues to keep busy in the film industry ensuring that his previous success has not been in vain. The rapper’s net worth is well over 2.4 million dollars, so he has the ability to clear his debt and bounce back from his loss fairly quick.