Dionne Warwick (left) and Whitney Houston Circa 1990 (Wireimage)
[From article]
She also receives an average $6,250 a month in wages from Star Girl Productions, the company she lists as her employer. [. . .] such entities - known as "loan out corporations" - through which to provide their services and reap legal tax benefits.
[. . .]
"The loan-out company could cover costs such as staff, travel, and pay the entertainer a salary that may be equal only to what that person requires to meet their monthly outgoings. It may be that there's more money, in the form of royalties or other income, that's paid to the loan-out company but which is not personal income to the entertainer.
"This is speculation, but part of the complication may be that the IRS sees her showing income equal to her expenses, but also having an interest in a company where money is coming in and going to others. That may lead the IRS to say 'Wait a minute'."
[. . .]
Intriguingly for a woman who only last October told an interviewer, "My mainstay is shopping. I love going down to Givenchy and the boutiques. I don't shop for what I need, just what I want," Warwick lists her monthly clothing expenses as zero
http://www.telegraph.co.uk/culture/music/9962594/Dionne-Warwick-dizzying-downfall-of-a-bankrupt-diva.html
Dionne Warwick: dizzying downfall of a bankrupt diva
As Dionne Warwick, one of the most successful singers of the 20th century, declares bankruptcy, Jacqui Goddard investigates how a star once earning $100,000 a month could be down to her last $1,000 in cash.
By Jacqui Goddard in Miami
2:54PM GMT 30 Mar 2013
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