The Largest Tax Debt in History

Although this took place in 2007, it remains to date the largest amount owed in back taxes.

Telecommunications mogul Walter Anderson was sentenced in 2007 for failing to pay a whopping $200 million in taxes to the IRS. Although in 1996 he earned over $126 million, his federal return showed only $67,939 in income and he paid $495 in taxes.

He avoided paying taxes on earnings of $365 million by using shell companies, aliases, offshore tax havens and secret drop boxes. One of the shell companies was the Smaller World Foundation, where Anderson hid hundreds of millions of dollars.  He claimed that he planned to use the Foundation’s money to promote world peace, family planning and space exploration.

During his sentencing hearing, friends, relatives and business associates testified that “he was a caring man who just made the mistake of trying to avoid paying his fair share of taxes, and wasn’t motivated by personal greed or the pursuit of luxury.”

Anderson was sentenced to nine years in federal prison, but a federal judge ruled that because prosecutors botched the plea deal, Anderson did not have to back the $200 million to the IRS.