In an ongoing dispute with state tax authorities, actor Stephen Baldwin recently appeared in court and made a large payment on his tax debt. The case has garnered significant media attention because of Mr. Baldwin’s public persona but the reality is that his case is not too uncommon, since many people misunderstand or miscalculate their tax obligations and wind up in debt to either state or federal tax authorities.

Although Mr. Baldwin is currently paying under a plan to resolve the debt by March of next year, prosecutors say that if he does not strictly comply with that agreement they will ask that he be sent to jail. Time behind bars may seem harsh for a financial violation but tax debt is taken very seriously by the courts and could result in prison time for those who do not resolve their disputes with tax authorities.

The tax debt is related to a failure to file proper state income tax returns for several years, including 2008, 2009, and 2010. This resulted in a felony charge for the Celebrity Apprentice contestant. He was accused of having a total of $400,000 in unpaid taxes, an amount which he has been allowed to pay in installments as a part of the plea deal. Another element of the agreement will be a discharge of the felony conviction if he remains compliant in the years to come.

The actor and reality television personality said that he did not leave his taxes unpaid to try to intentionally avoid his obligations but rather made an error and followed some bad advice.

Source: USA Today, “Actor Stephen Baldwin pays part of delinquent tax debt,” Steve Lieberman, Oct. 18, 2013.