Will Smith is undoubtedly one of the most bankable stars of Hollywood. It is all thanks to his blockbuster career that kept on blooming until last year. While his Oscars 2022 moment turned out to be quite a nightmare for him, it was not the only big ordeal that he went through in his life. He got into quite severe financial trouble when he was freshly enjoying the stardom of The Fresh Prince of Bel-Air.
Back in 2014, a report about IRS accused him of owing them a few million dollars in unpaid taxes emerged online. That led to many wondering about what exactly happened to him financially.
Will Smith Owed The IRS $2.8 Million!
Back in the 1990s, the then-young actor, Will Smith was enjoying the stardom of his sitcom, The Fresh Prince of Bel-Air, and several successful albums with his music career. However, his fame somehow ended up making the actor hit a financial bump. Around the same time, he admitted in his autobiography, Will that he got a notice from the IRS which informed him about owing $2.8 million back taxes.
It was a major concern for him at the time since his net worth was estimated to be around $6 million at the time per Forbes.
He admitted in his autobiography,
“I didn’t pay my taxes,” he wrote. “It’s not like I forgot, it was more like… I just didn’t pay my taxes.”
Having back taxes worth half his fortune was much shocking but it was the result of his overspending and mismanagement of his finances. He had emptied millions from his fortune to own his extravagant desires like cars, jewelry, and homes without planning much about the shortcomings or long-term purpose.
As to why debt kept on haunting the actor, he failed to pay the taxes on time for several years, which eventually resulted in heavy penalties and interests from the IRS.
Will Smith Eventually Sorted His Financial Crisis!
The IRS mess was quite a surprise for his financial team even to his family, but he knew what he did. After failing to pay them taxes for years, he eventually decided to pull himself out of it. He got back on track by agreeing to sort it along with interest and penalties.
Initially, he borrowed money to pay off some sum of debt. He also decided to let go of his extravagant lifestyle which included saying adios to his entities. He wrote in the book about being “broke” after everything expensive went all out.
“First went all the cars. Then my motorcycles. Stereo systems are very expensive when they go in — they’re worth damn near nothing when they come out. Then the excruciating decision was made — IRS, attorney, and accountants unanimously agreed: I would have to sell the Lower Merion house, pool table included.”
He was eventually able to get out of the debt completely by the end of the 1990s. Since then, he focused on maintaining a stable financial situation for himself to avoid that situation again in the future. He obviously succeeded as he is now among the richest stars in Hollywood right now!