Reality bites

By Tom Arnold
Illustration: Seth

Richard Hatch, the first winner of the reality television series Survivor, has been sentenced to 51 months in jail after claiming he forgot to tell his accountants about his earnings. He was convicted of not paying taxes on his US$1 million Survivor winnings, as well as other money collected via his newfound B-list celebrity status.

And Hatch isn’t alone. Tax shenanigans from big-time winners happen on this side of the borderas well. While game show and lottery winnings are not taxable in Canada, monies earned from financial windfalls, such as interest earned on invest-ments made with lottery winnings are taxable, with the Canada Revenue Agency releasing details of offenders as a deterrent.

One example: in 2002 Walter Jefferson, now CEO of Global Benefit Plan Consultants in Toronto, won $12.5 million in Lotto Super 7. Three years later, he pleaded guilty to five counts of income tax evasion on his 1996 to 2000 returns and paid $375,000 — almost twice the amount of the evaded federal tax.

“Why do people fall into this trap?” asks retired Toronto CA Barry Witkin. “The Richard Hatch thing is bizarre. I don’t know if it is greed or stupidity or what, because they get all this notoriety. People who are better known seem to get caught, like Harold Ballard. Regardless, it doesn’t pay to cheat.”

Someone should tell that to Hatch, who pleaded ignorance during his trial. His lawyer portrayed him as a bumbling bookkeeper, while Hatch told the court he forgot to tell his accountants about some income and thought the show’s producers would pay his taxes. Best known as “the fat naked guy” for refusing to wear clothes during the show, Hatch encouraged conflict among his fellow Survivor contestants in order to win, and at times seemed to handle his criminal case like an extended reality TV show. He even walked away from a plea deal with prosecutors. One thing is for sure, Hatch’s next round as a real-life survivor will require honesty and a clothes-on policy.