The Fyre Festival: Intro to Ja Rule’s Tax Troubles

By Sam Brunson

Like much of America, I watched a Fyre Festival documentary last week. I chose Hulu’s Fyre Fraud over Netflix’s Fyre: The Greatest Party That Never Happened because I only had time for one, and Fire Fraud had an interview with Billy McFarland. (I’ve since heard great things about Netflix’s documentary, too, so I’ll probably watch it eventually.)

About nineteen and a half minutes into the documentary, we’re introduced to Ja Rule; we see him in an interview (with Wendy, apparently), who says to him, “So you spent two years in prison.”

He responds, “Yeah, I went in on my state charge for the gun charge, and they ran it concurrent with my tax stuff.”

Now, Ja Rule’s tax troubles are probably the least interesting part of the documentary (and are over, iirc, as soon as he laughs after saying “tax stuff”). But I always find celebrity tax evasion interesting, so I thought I’d run it down a little.

On March 29, 2011, the U.S. Attorney for the District of New Jersey charged Ja Rule with five counts of failing to file a tax return. Apparently, he was the sole shareholder of ASJA Inc. and Rule Tours Inc. ASJA paid him royalties on his songs, and Rule Tours paid him in connection with his tours and live performances. And how much did he earn? According to the information filed with the court, he was paid at least:

• $1 million in 2004;
• $1.59 million in 2005;
• $760,000 in 2006;
• $540,000 in 2007; and
• $490,000 in 2008.

The U.S. attorney charged him with “knowingly and willfully failing to make a return” for each of those five years. (Why “knowingly and willfully”? Because willful failure to make a return is a misdemeanor, punishable by a fine of up to $25,000 and up to one year in prison.)

That same day, Ja Rule pleaded guilty to three of the five counts. (As a side note, his bail was set at $500,000, and his travel was restricted to New York and New Jersey.) He was sentenced to 28 months in prison, a year of supervised release, and was required to pay back taxes of about $1.14 million, plus interest and penalties.

And since he was released from prison, how has Ja Rule done at paying his taxes? Apparently not stellarly. Bossip reports that he hasn’t paid taxes in 11 years, and has the tax liens to prove it.

I’ll confess that I’m not terribly familiar with Bossip (like, I’d never heard of it until I started Googling Ja Rule and taxes), so I wanted to double-check. And their story pans out: according to a Lexis Public Records search, since 2013, the IRS has filed six federal tax liens against his property. The most recent, on May 31, 2018, was for almost $1.8 million. The IRS also filed a tax lien for $363,000 in March, 2018, another for $84,000 in 2015, one for $187,000 in 2014, and two in 2013, one for $490,000 and the other for about $1.7 million.

Will he pay off his tax liability? Honestly, I don’t know. In addition to the millions of dollars he owes the federal government, he’s potentially facing a lot of other financial liability. As I was looking through dockets to find his failure to file case, I had to wade through a lot of cases stemming from the Fyre Festival that include him as a defendant. So in addition to his tax liability, he’s facing a lot of potential additional liability.