Ernie Kovacs - Tax Evasion

Tax Evasion

A frequent critic of the U.S. tax system, Kovacs owed the IRS several hundred thousand dollars in back taxes, thanks to his simple refusal to pay the bulk of them. Up to 90% of his earnings were garnished as a result. His long battles with the IRS inspired Kovacs to tie up his money in a convoluted series of paper corporations in the U.S. and Canada. He would give them bizarre names, such as "The Bazooka Dooka Hicka Hocka Hookah Company" to thumb his nose at the government. In 1961, Kovacs was served with a $75,000 lien for back taxes; that same day he bought the California Racquet Club with the apparent hope of being able to use it as a tax write-off. The property had mortgages at the time of purchase which were later paid by Edie Adams.

His tax woes also affected Kovacs' career, forcing him to take any offered work to pay off his debt. This included the ABC game show Take a Good Look, appearances on variety shows such as NBC's The Ford Show, Starring Tennessee Ernie Ford, and some of his less memorable movie roles. He also filmed an unaired 1962 pilot episode for a proposed CBS series, Medicine Man (co-starring Buster Keaton, pilot episode titled "A Pony For Chris"). Kovacs' role was that of Dr. P. Crookshank, a traveling medicine salesman in the 1870s selling Mother McGreevy's Wizard Juice, also known as "man's best friend in a bottle". This was quietly abandoned after his death, which occurred the day after filming some scenes for the pilot in Griffith Park. CBS initially intended to air the show as part of a summer replacement program, The Comedy Spot, but decided against it due to issues with Kovacs' estate. The pilot is part of the public collection of the Paley Center for Media.

Adams, who married and divorced twice after Kovacs' death, refused help from celebrity friends who planned a benefit for the purpose. Saying "I can take care of my own children," and being determined to accept offers only from those who wanted to hire her for her talents, Edie managed to pay off all of Ernie's debts.

Some of the issues regarding Kovacs' tax problems were still unresolved years after his death. Ernie had purchased two insurance policies in 1951; his mother was named as the primary beneficiary of them. The IRS placed a lien against them both for their cash value in 1961. To stop the actions being taken against her, Mary Kovacs had to go to Federal court. In early 1966 their ruling resolved the issue, with the last sentence of the document reading: "Prima facie, it looks as if, within the limits of discretion permitted the government by the relevant statutes, an injustice is being done Mary Kovacs."