By Ben Goggin -
NBC News
Rapper Ye, formerly known as Kanye West, has long been outspoken about his financial problems and debts.
In 2016, before he became a billionaire, he claimed he was $53 million in debt, and in the past month, he's told four of his personal accounts have been frozen over tax claims.
Government records reviewed by NBC News, sister network of Noticias Telemundo, reveal that at least one of its companies may also have six-figure debts.
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The records, a series of state tax lien notices from the past two years, show the state of California claims that Yeezy Apparel, a company reportedly owned and managed by Ye, owes more than $600,000 in taxes.
Three separate notification letters were sent in July 2021, in February and in September.
A lien is a claim made on the assets of a person or entity in response to an alleged debt.
The alleged debts add to the growing controversy surrounding Ye and his businesses.
Forbes recently removed the artist from its billionaires list, citing his terminated business deals.
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Four tax law experts said the amount owed by Yeezy Apparel is significant and could be a sign of deeper problems at the company.
“Multiple California tax liens, totaling $600,000, are certainly a sign of extreme incompetence or extreme liquidity problems,” said USC Gould School of Law professor Edward McCaffery, who specializes in tax law.
“It's kind of an amber alert about the financial health of the company,” he added.
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According to the California State Government website, a lien can be imposed if a business or taxpayer does not respond to your letters about taxes owed, pay in full, or set up a payment plan.
Yeezy Apparel has been operating in California since 2017, according to the state's public business records, and was listed as active and in "good" standing in an annual filing in January.
Yeezy is Ye's leading fashion and lifestyle brand, known for its tumultuous collaborations with Adidas and Gap, both of which were canceled over their anti-Semitic comments.
Yeezy Apparel is one of five active California Yeezy limited liability companies managed by Ye.
In 2019, Forbes noted in a profile of the rapper that he owned 100% of Yeezy.
A year later, Yeezy took over $2.3 million in loans from the Paycheck Protection Program.
Lynn LoPucki, a University of Florida law professor specializing in secured transactions and bankruptcy research, said the liens also raise questions about California's debt collection policies.
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“The state is subject to some criticism for just sitting on this when there is business going on there that they could collect from,” he said.
Representatives for Ye and Yeezy did not respond to a request for comment.
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An NBC News investigation uncovered accounts by former colleagues that Ye used anti-Semitic language in the workplace and praised Hitler.
The report unearthed a settlement and payment agreement between Ye and a former colleague that came after allegations of such comments.
On Monday, Ye painted his own picture of the financial chaos he says he is living in, telling far-right podcast host Tim Pool that four of his bank accounts had been frozen with a $75 million hold, and that his accountants told him that morning he owes $50 million in taxes.
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The Internal Revenue Service (IRS) said: "Federal law prohibits the IRS from commenting or confirming anything related to the private business of taxpayers."
While the amount Yeezy Apparel is said to owe is only a fraction of the multi-billion-dollar figures cited by Ye himself, the liens fit a pattern found among his other businesses.
NBC News found 17 government-imposed liens in California against three of Ye's businesses and a charity set up in his name dating back to 2012. Four of the liens were labeled assets with no indication they had been canceled or paid.
“The tax lien indicates that the state owes a debt to the state,” LoPucki explained.
Most of the garnishments examined by NBC News were issued by the California Employment Development Department.
Ye, better known as Kanye West, in Paris, France on October 2, 2022. Edward Berthelot / GC Images
A representative for the department said he could not comment on the taxpayer information.
Four experts who reviewed the liens agreed that they most likely were for payroll taxes, since the department oversees payroll taxes and unemployment in the state.
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“It would be things like unemployment insurance and state taxes on disability insurance, things like that,” said Kirk Stark, Barrall Family Professor of Tax Law and Policy at UCLA Law School.
It is not clear what chain of events led to the filing of the embargoes, but all four experts agree that the imposition of an embargo indicates that there was most likely prior communication between the State and Yeezy Apparel that allowed the company to resolve or contest debts before a lien is imposed.
“Usually they get very serious before an embargo is imposed.
This is not the first step for a tax agency,” recalled David Gamage, a tax law professor at Indiana University Bloomington.
“Systematically ignoring communications from the Employment Development Department could be the basis for the Department to say, 'Okay, we're going to file this embargo and get it going,'” Stark opined, using an abbreviation for Employment Development Department.
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Of the liens listed as assets with no indication of completion, the oldest is from fiscal year 2020.
Experts who spoke to NBC News said the foreclosures could be indicative of several larger business problems.
“If you're screwing up on this, you've got bigger problems and there's probably other things you're not paying for,” McCaffery said.
"But on the other hand, it could be consistent with a bit of a sloppy operation," he said.
It is unclear what the future of the Yeezy brand and its associated companies is after the termination of the agreement with Adidas.
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According to Forbes, which allegedly viewed internal Yeezy documentation in the process of assessing Ye's billionaire status, the Yeezy brand was "functionally tied" to Adidas during the term of his contract.
After the deal was terminated, Adidas said in an earnings call that it would continue to sell Yeezy designs under a different brand.
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"Let me be clear, we own all intellectual property, we own all designs, we own all versions and new colorways," said Harm Ohlmeyer, Adidas' chief financial officer.
Zak Kurtz, co-founder and chief executive of the law firm Sneaker & Streetwear Legal Services, said the paths forward for Yeezy as a viable business are limited given Adidas's ownership of much of Yeezy's intellectual property.
“What he can use is what he has, you know, his trademarks, and any new designs or anything new that he comes up with,” Kurtz said.
“And I think that's really where the brand needs to go — in my opinion, they would have to create new things,” he noted.
Kenneth Anand, co-author of the legal and business book on sneakers ,
Sneaker Law
, added that the company could seek another partnership with a major brand.
“It could align itself with a new licensee, perhaps one that can offer the same type of products and services that Gap and/or Adidas did, although it seems unlikely that any company would be willing to take a chance on a volatile brand and designer like Ye.” wrote Anand, who has also worked as Yeezy's head of business development and general counsel, in a text message.
Anand said he could only comment on the company from the perspective of an industry insider, noting that consumers had begun to turn against Ye.
“Ye's recent statements have clearly done a disservice to the Yeezy brand,” Anand wrote.
"Consumers are openly declaring that they will no longer support or wear Yeezy, even if they have spent a considerable amount of money on the brand's products."