Trip Hawkins in serious shizzle over $20m tax bill

Monday, 28th March 2011 20:24 GMT By Patrick Garratt

A San Francisco federal judge has rejected the effort of EA founder Trip Hawkins to use personal bankruptcy to cancel more than $20 million of federal and California state tax obligations stemming from, according to this Forbes report, “abusive tax shelters he used to shield vast profits from Electronic Arts, the pioneering video gaming firm he founded nearly three decades ago.”

Judge Jeffrey S White upheld an earlier bankruptcy-court ruling this week, saying Hawkins knew he was insolvent after the Internal Revenue Service disallowed his tax shelters but “continued to spend money extravagantly with knowledge of his tax liabilities” to the IRS and the California Franchise Tax Board.

“Hawkins planned to defeat his taxes via bankruptcy and continue living the lifestyle to which he had grown accustomed,” the judge declared.

Cited evidence included purchase of a $70,000 car–the fourth vehicle in a two-driver household.

Hawkins, now the CEO of mobile game firm Digital Chocolate, filed for bankruptcy alongside his wife in 2006, claiming assets of $5 million compared to liabilities of $28 million, the majority of which is tax debt.

At the time, the couple obtained a general discharge of their debts, but the US tax agencies successfully avoided the cleansing under a provision of bankruptcy law that prohibits discharge of tax debts if the debtor “willfully attempted in any manner to evade or defeat such tax.”

The outstanding tax liability is not clear from court filings but appears to be between $20 million and $25 million.

In 2006 the IRS rejected Hawkins’ proposal of an offer-in-compromise settlement of his tax obligations for $8 million.


Hawkins co-founded EA in 1982, before going on to run 3DO in 1991. At his wealthiest, Hawkins was estimated to be worth more than $100 million, mainly in EA stock.

Read the full thing on Forbes. It’s not pretty.



  1. xino

    lol…how do these people end up not paying their tax bills? lol

    like Snipes, just send Hawkins to jail and let’s move on:)

    #1 4 years ago
  2. DSB


    At this point, maybe he should just try to convince everybody that he’s really David Copperfield.

    #2 4 years ago
  3. ManuOtaku

    #2 you know after seeing your comment, i see in that picture he looks a lot like Copperfield..jejejeje…

    #3 4 years ago
  4. DeathJynx

    I bet he is kicking himself in the ass for 3DO…

    #4 4 years ago
  5. Phoenixblight


    There are of reasons like trusting your taxes to a crappy accountant ie MC hammer, forgetting that you need to pay uncle Sam, deliberately not paying taxes.

    #5 4 years ago
  6. expose the core

    I have no sympathy for the man, after all he is the old Electronic Arts boss who is to blame for the death of bullfrog, westwood etc.

    #6 4 years ago

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