Tax Fraud in the Film Industry : Inside the United States Cinema Circus

Since the first film tax incentive offered more than a decade ago in the United States, the various states have sought to embrace filmmakers with incentives in the hopes of luring film production into their states. States envisaged increased benefits and revenues to state and municipal coffers from a variety of revenue streams. The type and amount of resultant incentives offered on a state-by-state basis have proliferated due to the increased competition for the film industry among the states. Unfortunately, the benefits associated with such incentives have incurred a range of problems and the crescendo of incentives has come under fire. Furthermore, less than ethical individuals have seen the generous tax incentives as lucrative opportunities to commit tax fraud. Many are in jail or on trial. This study explores recent tax scandals and questions whether the benefits are worth the cost. Of particular focus is the film industry in the United States and the related tax fraud issues