Filmmaker and philanthropist Tyler Perry is a true rags-to-riches story, going from being homeless to one of the richest men in entertainment within two decades. And with a massive influx of new money, like all taxpaying Americans, the man behind Madea has had to face the Internal Revenue Service — sometimes owing money and sometimes on the receiving end.
During the 2022 Earn Your Leisure Conference, he shared his experience with understanding taxes and how one year the government owed him a whopping $9 million in return.
Perry told the sold-out audience, “Having the understanding of money wasn’t something I had. No one had taught me that.”
Perry started his career producing live theatre in the 1990s with his popular “Madea” character at the core of each project. Perry then used the character to break into feature films and television. To date, considering the past three decades of nonstop grind, the “Madea” franchise has grossed more than $660 million for the content creator.
He later opened Tyler Perry Studios, a 330-acre property in Atlanta with 12 sound stages and custom sets that include a to-scale White House, and has a portfolio of hit shows, movies and deals.
But he was not prepared for the challenges of managing the money that his projects were making.
“Money isn’t something that I had and nobody taught me that taxes had to be paid,” he shared. “I didn’t go to college, but I paid for Harvard many times over in the mistakes that I made.”
The billionaire then shared a story of being audited by someone from the IRS who was obsessed with what he was doing with his money. Perry believed the person’s interest was improper and got him removed from the case. The agency replaced the first agent with one of his superiors.
Perry shared that the audit took three years and that he spent hundreds of thousands of dollars in accounting to make sure he was in compliance with the federal agency’s requests.
“So this audit went on for three years,” Perry said. “I’m spending hundreds of thousands of dollars in accounting with accountants for the audit and I am getting so mad, and so frustrated.”
He asked himself, “Why the hell is this going on? What is it?”
Perry said he realized in his frustration he needed to pause for a beat because “there’s something to learn here.”
“We get to the end of the audit and they, the IRS, owed me $9 million,” he revealed.
All of his accountants were so excited and ran to him, saying, “Oh, my God! Isn’t that great? Isn’t this great,’ ” he said.
In response to their gleeful relief, he said, “ ‘No! He– no! How did you miss me paying $9 million?’ ”
After this mistake, the producer and screenwriter said he had to fire the team responsible for his accounting.
“Everybody gone! I had to stop going to H&R block for my taxes at some point,” he joked.
In a serious tone, he dropped additional jewels, saying, “I learned in progress and it’s okay.”
He added, “Listen to me: In business, it’s okay to make mistakes. It’s okay to learn. You have to learn, but don’t let it keep happening over and over again. That’s one thing about me. I’ll let you make a million mistakes, but you can’t do the same thing over and over again.”
“That’s how I run my business. Here’s the mistake. Let’s fix it; let’s move forward,” he said.