CHAPTER 21

Slow Dancing with the IRS

I flew home from Grandad’s funeral, thinking I was fine, that I was ready to jump right back into recording my album. Driving into the city from the Toronto airport, I spotted an old man covered in two dirty green garbage bags, passed out by a bus stop on a downtown street. It was a bitterly cold night, well below freezing. I parked my car, approached the sleeping man, tried unsuccessfully to wake him and then signalled a cab, asking the driver to call an ambulance.

A policeman soon showed up and found me kneeling beside the still-unconscious man. I’d thrown my down jacket over the man’s small, shrivelled frame, and something about the way it covered him so completely reminded me of a sheet spread over a corpse. That thought, along with a blast of northern wind, made me shiver. And in no time, my shivering had given way to sobbing.

“What’s wrong?” The policeman was standing over me.

“That man is going to die,” I said, “unless he gets shelter.”

“Are you Dan Hill?” the policeman asked. I glanced up at him and saw that familiar look of wonder spreading across his face. The look I once craved. The look I now detested. Admitting that yes, I was the Dan Hill, I gestured towards the frozen old man, now curled into the fetal position. It scared me that the cop had yet to really notice him.

The policeman offered me his notepad to sign. Was I in some Monty Python meets Candid Camera sketch? That’s when I started laughing. The wind had made a cold mishmash of my tears, and the policeman stepped away from me, the way one gives a crazy person lots of space. I waited until the ambulance came and then drove home.

It wasn’t only Granddad who had died. It felt as though everything around me was slowly dying. Everywhere I turned there was loss, turmoil and rejection. I’d always dealt with pain by turning to songwriting, but for the first time in my life, music wasn’t opening its arms to me. It felt like music was causing me more hurt than healing.

Over the three years following my break with the McCauleys my career bottomed out. Epic, a division of Columbia Records in the United States, purchased the finished master of my fifth record in 1980, in the process signing me to a multi-label record deal. They paid me $450,000. This was to reimburse me for the cost of my self-financed record and fund my follow-up album (to be cut and released eighteen months later), and to ease the financial burden of me buying myself out of 20th Century Records. But with twenty-five percent of Epic’s money commissioned by my managers and another ten percent going to my lawyer, combined with the astronomical travel expenses incurred sealing the deal, I would eventually be deeply out-of-pocket. Two poorly selling records later, I was dropped from the label. How quickly things had changed: at twenty-five, I was considered so valuable that I’d spent a fortune to get out of a U.S. record contract; at twenty-seven, I couldn’t pay a U.S. label to sign me. For my career to turn so cold, so fast, left me devastated.

A pop singer’s rise is public. A pop singer’s fall is also public. And for much the same reason that people are obsessed and moved by success stories, a celebrity’s descent is equally, if morbidly, transfixing. Someone else’s misery, particularly a famous person’s, makes us feel better about ourselves. Our own personal failures and disappointments feel a little easier to swallow.

Fortunately, Dad’s salient father-son lesson—Get tough in my household or get eaten alive out there in the real world—served me well through the mid-seventies and early eighties. I spent the early part of my twenties subjected to adoration bordering on deification, only to spend the second half of my twenties stumbling through a big Canadian media backlash, as my star exploded and just as quickly faded, to give way to the next breaking story.

Since I had revelled in the perks of stardom, it seemed only fair that I should suck up the ridicule that came with falling out of stardom, take my public lashing and move on. “Remember what Kennedy said,” Dad used to tell me when he caught me feeling a little too sorry for myself, “don’t get mad, get even.” And my revenge would come by proving to myself that I could take it.

For me, as a fading Canadian celebrity, no place offered the sensation of a brand-new start more than Los Angeles. In the early eighties, no other city in the world hosted as many internationally successful songwriters. No one in Hollywood cared about your “cool factor”, whether you wrote alternative or wimpy songs; everything in Hollywood boiled down to money. Thus, the L.A. songwriting community regarded me objectively: I’d co-written one of the biggest hits of the seventies and had recently co-penned another R&B/adult contemporary crossover smash, titled “In Your Eyes,” for George Benson. I found L.A. to be an amazing blend of the superficial and the unabashedly honest. If you can write or co-write a hit, you’re welcome everywhere. And I felt welcomed.

Still, hit songs take time. Not just time to write, but time to demo—each instrument, each vocal part, recorded perfectly and expensively. Then time to place (if you’re really lucky) with the right artist. Then time for that right artist’s record to come out. Then time to see if that right artist chooses your song as one of a handful of singles. Then, if your song is so fortunate, time for it to become a hit. If you beat the odds and score with a hit, then you wait for over a year to see any royalties. If you don’t get screwed, that is. Thousands of talented writers have grown old in L.A. chasing down hits. The standard industry joke goes like this: What did the songwriter say when he won the ten-million-dollar lottery? Answer: I’m going to spend it all on demos until my money runs out.

With the royalties to “Sometimes” still tied up in escrow till the McCauley lawsuit was resolved, I felt a lot like that lottery-winning songwriter. I was running out of money. Finkelstein, figuring (with good reason) that my singing career was pretty much over, split with Fiedler. Bruce Cockburn, whose career had always been as solid as mine had been mercurial, stayed on with Finkelstein, and Fiedler and I agreed to continue working together. Finkelstein’s departure was a signal to everyone in the Canadian music business that, short of a miracle, my reign as one of the country’s top pop singers was over.

But then another, far more serious problem surfaced. In 1982 the U.S. Internal Revenue Service sued me for tax avoidance. The Canadian backlash, okay, that came with the territory. My frozen royalties would in time be released. Being treated like a pariah by corporate record companies, well, I could always keep writing for the hot acts of the moment. But the IRS? That made no sense. Never a big spender, raised by parents who’d taught me that people with healthy incomes should pay more taxes, I’d always assumed tax avoidance charges happened either to the amoral super-rich, or to ignorant celebrities who had been bilked by their accountants and managers. Which category best described me?

And so, with my career a shambles and my royalties tied up indefinitely, I swallowed my pride and did the one thing I’d always sworn I’d never do. I went to my mom and dad and told them that I could be on the verge of losing everything.

It’s a six-mile uphill run from my house to my parents’ house, straight up Victoria Park. The run is not particularly aesthetic; strip malls give way to mega-malls, which then give way to faded, poorly maintained apartment complexes, occasionally interrupted by very small, always empty parks. Cars and buses rushed by within inches of the sidewalk, polluting my lungs with exhaust and leaving my face grimy, my eyes itchy and stinging with dust and sand and specks of gravel. But the run felt mandatory, at once exhausting and exhilarating. Pieces of my past life drifted by with each step. At the two-mile mark I spotted the pancake house where Dad used to take us on special Sundays, once our chores were completed. Now it was a McDonald’s. A mile later, an insurance company advertised its services in the same cubicle-like building where I started taking guitar lessons at ten. The Zumburger, just south of Eglinton, where I used to go as a teenager to spend the five bucks I’d earned from a gig at an old folk’s home, or when I’d been kicked offstage at a downtown bar once the manager realized I was below the legal drinking age, had become a used-car lot.

As I turned off Victoria Park and cruised the final half-mile to my parents’ house, my knees started to ache, making me wish I had Brian Maxwell’s endurance. The last time I’d run this course was with Brian two years ago, after he’d qualified for the 1980 Olympics, which Canada then boycotted. We had both been struck by the similarity of our quick success and even quicker setbacks. We’d promised each other that we wouldn’t give up, that we’d keep fighting, because fighting back, whether against Olympic boycotts or uninterested record companies that believed you were past your expiry date, was the only thing that made sense.

“Donna, look, that crazy Danny has risked his life running all the way from his house to ours! Daggum, boy, you smell like a barn. Let me get you one of my old sweatshirts to change into.”

I wandered into the family room. Strange, how this very room where Dad had grilled me so effectively when I was younger had, over the years, turned into a kind of safe haven, the place where the three of us would gather whenever I was in some kind of trouble and in need of their support. Mocking me from the top of an oversized bookcase that housed hundreds of Dad’s old sociology texts was all the memorabilia of my past success, from international platinum records to Juno awards, to ASCAP airplay awards, to my Grammy nomination. I’d never felt comfortable keeping all those awards at my house. Bad luck. But even here, my gaudy career showpieces felt out of place, as if they belonged to someone who no longer existed, who never really existed in the first place. Childhood memories intermingled with pop star memories, as the cold currents from the air conditioning vents pressed my sweat-soaked T-shirt into my chest, causing me to shiver.

“Look at him, Donna. That boy’s almost twenty-eight and thinks he can run all the way from his house to ours as if he’s still a teenager.”

When I made a flip remark about how running was the only constant left in my life, Mom knew something was up.

“Are you all right, Danny?” she asked.

I tried to think of how I could lead up to the IRS quagmire. Where to start? Hey Mom, how’s Larry’s job at the Winnipeg Free Press? Oh yeah, by the way, guess what kind of notice I received in the mail? Talk about a rock star stereotype. Next thing I’ll be arrested for exposing myself on stage.

“What is it, Danny?” Dad asked, my unlikely silence making him nervous.

Better get this over with, I thought.

“The IRS is suing me. I’ve been told they think they can set a kind of precedent with my case.”

“The IRS?” my parents repeated, aghast. “KKK” notwithstanding, that was about the worst three-letter abbreviation I could spring on them.

Knowing Dad’s impatience for bureaucratic details, I tried to simplify a complicated story. Back in 1976, the two Bernies, on the advice of the third Bernie—the attorney—suggested I take advantage of my dual citizenship and get an American passport. This would make it easier for me to tour in the States. The result was me being “dual taxed,” meaning that if I earned fifty thousand dollars for a three-night stand at Ontario Place, on which I paid taxes to the Canadian government, the IRS demanded a similarly huge chunk. With my accountant and tax lawyer charging me a fortune to untangle the U.S.-Canada tax overlap, I was advised to revoke my American citizenship, as well as my dual status, immediately. In 1979, I’d laughed at the question posed by an American official in the U.S. consulate in Vancouver: “Are you sure you want to do this, Mr. Hill? We don’t take kindly to high-profile U.S. citizens revoking their citizenship.”

The American official was doing his best to warn me that I might be waking a sleeping giant. Meaning that the IRS viewed me as a rich (as in generous-tax-paying) celebrity. For me to revoke my U.S. citizenship would be seen as an insult, and the IRS would not take kindly to a slap in the face by some nouveau riche pop star.

The official’s warning was lost on me. I was smugly proud of how my response—”Sorry, I must have the wrong address. Guess I stumbled into the Russian embassy by mistake”—pissed him off.

Months later, I received invoices and threats from the IRS claiming that, as an individual, I couldn’t claim a corporate tax rate. Since I’d incorporated in 1975, my earnings over the last five years had been reassessed. Based on this assessment, I owed $200,000. Plus penalties, fines and interests growing daily. My entertainment lawyer hired a top Toronto tax lawyer on my behalf, who in turn hired a top tax firm based in Manhattan. Now my fast-mounting legal fees were threatening to eclipse what I allegedly owed the IRS.

It took a great deal to surprise my parents. They shared the grim expression of students attending a class in music-business economics—music-business economics gone awry.

Finally, Dad said, “This is exactly what they did to Joe Louis. And Jack Johnson. This is the story of every Black celebrity who makes it in America.”

“Not just Black celebrities, Dan,” Mom corrected, “and who’s this ‘they’ you’re talking about?” My parents continued their familiar jousting, part of which was the way they naturally communicated, and part of which was a performance put on for the purpose of distracting me from my business woes.

Now that I’d finally come clean about the collapsing state of my career, I felt as though I’d come out of a ten-year coma only to find myself back where I was when I was eighteen: broke, unemployed and unemployable, and dependent on my parents.

“It’s not as though you blew all your money on jewellery and drugs and fancy cars,” Mom said. But I could see that my lack of superstar spending left her all the more confused as to how I could have blown through so much cash, so fast. Wanting to say something to make me feel better, she added, “And you’ve always been more than generous with all of us.”

I told my parents that I’d lived without much money before and I could certainly do it again. Singing was never about money in the first place. So then, what was singing about? If my singing was about impressing Dad, as much as anything else, where did that leave me now?

My tax imbroglio meant that, in a worst-case scenario, every future penny my songs or my concerts earned, in fact anything I earned, could be garnisheed. Usually I could read Dad’s face, but not this time. Probably because he, like Mom, was pondering so many things, reviewing all this strange, shady information, still not sure what to make of it all. Then he scrambled to his feet, all smiles, like he’d just thought of something that would solve everything.

“Donna, why don’t we get out our RRSPs and bonds, so Danny can take a look at what we’ve got.” Dad motioned for Mom to head upstairs with him.

“Dan, you don’t even know where all our financial statements are. They’re not up in your office, they’re in the basement in the boxes underneath your father’s old desk. Honestly, what’s going to happen to you if I die first?”

Cheerfully arguing about which of the two of them would be the first to go, they disappeared downstairs, their lively voices fading into the steady, dull tumble of the washing machine. I considered taking off before things got really humiliating, but then I remembered that I’d run over. I had no car and no wallet. Brushing aside the symbolism, I tried to comfort myself with the reminder that since leaving home as a teenager I’d never received a cent from my parents. They came back as I was putting on my shoes to leave. What the hell, it was a downhill run home. This could be the start of my new austerity program.

“Daggum, son, one more step of running today and you’re likely to break something.” With Dad playfully standing between me and the front door (reminding me of earlier years when he refused to let me out of the house at night), Mom painstakingly illustrated how much money they’d saved. They’d never shown me their savings before; somehow by revealing, right down to the penny, their life’s worth, they appeared all the more vulnerable.

“Whatever money you need, we’ll help out as best we can. Your mother and I know you’ll find a way to pay it back. You’re a survivor. You’ve never been afraid of hard work.”

I was waiting for the inevitable “Now might be a good time for you to go to college,” when Dad said something that made me feel even more exposed, because it was so unlike him.

“We love you, Danny. We’ll always be proud of you. You don’t think Sinatra, or the Count, went through ups and downs like this?”

I turned down my parents’ offer of money. Then I left their house. Other than the day his father died, Dad had always led with his strong side. At least in front of me. Now it was up to me to return the favour. Having reassured my parents that I’d do more walking than jogging on my way home, I ambled down their driveway. Even without turning around I could feel them standing side by side on the front lawn, watching me head up the sidewalk.

When I knew they couldn’t see me any longer, I attempted to run. But my legs were too sore to even hobble. Clearly, running wasn’t the constant in my life after all. It was family.