Settlement amount is $45 million
Mario Kassar’s agreement to settle his tax dispute with the Internal Revenue Service for a jaw-dropping $45 million has industry observers scratching their heads and wondering how he can pay that amount. But a source close to the situation says that Kassar only has to come up with a fraction of that amount.
“This was a face-saver for the government,” says a source familiar with the tax dispute stemming from the days when Kassar headed Carolco. The source estimated that Kassar is actually on the hook for about $3 million.
“The ($45 million) number is incorrect because it fails to include an equal offsetting deduction in later years. Mr. Kassar’s liability will only be for interest on the taxes for a year or two.”
In any case, the tax settlement will be an additional incentive for Kassar to produce a hit film soon. He’s prepping “T3: Rise of the Machines” and will see the release of “I Spy” Nov. 1 — his first film to hit theaters in seven years.
As the co-founder of Carolco, Kassar amassed a fortune as the producer of films like the “First Blood”/”Rambo” franchise, “Terminator II,” “Total Recall,” “Basic Instinct,” “Cliffhanger” and “Stargate.”
However, he and partner Andy Vajna also earned a reputation for lavish spending and convoluted financing practices. This attracted the government’s attention and spawned a long-running investigation into the Carolco principals.
Carolco filed for bankruptcy seven years ago after a number of high-profile bombs culminating with “Showgirls,” “Cutthroat Island” and “Lolita.”
Kassar’s attorney, Steven Toscher, shed little light on how the producer would make restitution.
“Suitable arrangements have been made,” Toscher told Daily Variety. “It’s the end of a very long ordeal, and everybody’s happy it’s over.”