When Kanye West took to the skies Monday night for an episode of "Airpool Karaoke" with James Corden on The Late Late Show, he shared some surprising financial figures.
"God is using me as a human being… as humbly as I can put it he’s using me to show off. Last year, I made $115 million and still ended up $35 million in debt. This year, I looked up and I just got $68 million returned to me on my tax returns," West claimed about his apparently divinely inspired tax windfall. "And people say, ‘Oh, don’t talk about these numbers.’ No, people need to hear someone that’s been put into debt by the system talk about these kind of numbers now that they’re in service to Christ.”
That got us wondering about how, or if, those numbers added up. So Billboard contacted two licensed New York CPAs — Ariel LaFond and Marcum Accountants & Advisors' Robert Pesce — to ask them to break down the figures for us to find out, as Corden asked, if Ye's spiritual awakening really could have paid off that handsomely.
"First off, we don't have that many facts. So what I would say is that they're kind of unrelated," LaFond says of the figures West shared; LaFond and Pesce have no first-hand knowledge of West's finances or tax returns and their comments are based only on what Ye shared with Corden. "… He could have grossed $115 million, but then his expenses could have been more than $115 million, which would leave him $35 million in debt," she says.
"He could literally have $1 billion in the bank and keep $35 million in debt just because he hasn't paid it off yet," LaFond adds. "Making $115 million doesn't mean he directly needs to pay off his $35 million debt, and additionally he could have made $115 million and spent it all." She suggests thinking about it like student loan debt. You could have $200,000 in student loan debt and make $500,000 a year but keep paying the minimum payment on your loan for years. "The way the government works is you're really not going to generate such a large refund without paying any tax in in quarterly estimates," she says.
"Maybe he paid in $68 million, which is about half of his $115 million, throughout the year, and maybe he thought he was going to be more profitable than he was and at the end of the year he actually ran a huge loss and you're just refunded the money you paid in. This isn't $68 million that came from nowhere. It's not a crazy credit or something like that."
Similarly, Pesce says that it's very possible to have such big swings in income and tax liability, especially in the entertainment business. "There might have been a lot more expenses associated with this debt that gave rise to this suprising tax refund," Pesce says. But it's hard to tell what the real story is when you get just a bit of a conversation between two non-tax professionals, he noted, adding that if anything, it makes him think that West could possibly stand to have a closer relationship with his tax advisers.
Which brings us back to the bit when Corden asks if Ye’s spiritual awakening is a factor in his success, to which Kanye responded absolutely. “He’s showin' off. He’s showing out," the rapper seemingly said of God. "Yeezy worth $3 billion… it’s the number one Google search read in the world. He’s showin’ out!”
Is it possible that there was a divine intervention at the IRS? "Unfortunately it's not from God]; it's also not from other people," LaFond says. "I think this is money he paid in that he got refunded when he operated at a loss at the end of the year."
A spokesperson for West did not respond for comment at press time.
Watch the karaoke segment below (tax talk comes at 13-minute mark):