From Uncle Rico to Uncle Sam: What White Lotus Can Teach Us About Tax Law

I don’t know if I’ve got any White Lotus fans in the audience, but I am one—so that’s what we’re talking about today.

Season 3 of the hit HBO show White Lotus just wrapped up its finale on Sunday night. If you know, you know... but Heather and I absolutely loved it. This was easily the best of the three seasons and, without a doubt, it kept us guessing right up until the end.

If you haven’t seen the finale yet or if you’re saving it for a Thanksgiving weekend binge, don’t worry—I won’t spoil the ending. Just know that every character was fantastic, and every storyline hit the mark.

Now, in the spirit of putting my own spin on things... why not turn entertainment into a tax lesson? I know, I know—you're thinking, “Geez, Vince, don’t ruin a good show with tax talk.” But stick with me.

So in the finale—spoiler alert if you want to look away—Belinda’s character is offered $100,000 by Greg (a.k.a. Uncle Rico—yes, that “I can throw a football over them mountains!” guy from Napoleon Dynamite) to keep quiet about a murder from a previous season that implicates him.

Belinda and her son discuss the offer and decide to play hardball. They counter with $5 million. Bold move, right? It didn’t seem like it would fly—but guess what? Later in the episode, Belinda logs into her bank account and sees $5 million (plus change) sitting there. Uncle Rico followed through.

So what does Belinda have to do in return? Theoretically, just keep her mouth shut about what she knows about this murder. And this is where the tax angle comes in.

At first glance, when someone gives you money as a gift, it’s tax-free to the recipient. The tax burden usually falls on the giver. We’ve talked about this before—see: Gift-Giving in Style: Keep It Generous Without Triggering the Tax Man.

But here’s the catch: for a transfer of money to qualify as a true “gift,” it must come from “detached and disinterested generosity.” In other words, it can’t be given in exchange for something—like silence.

That’s exactly where an IRS auditor would zero in. This wasn’t a gift. Belinda had to stay quiet. It’s not inheritance either—no one died and left her money.

So if Belinda were our client? This would be taxable income. Sorry, Belinda.

Under IRC § 61(a) and IRS Publication 525, this payment is income, plain and simple. There’s no exclusion for hush money—quite the opposite. Pub 525 explicitly requires things like bribes and illegal payments to be reported. And PLR 200151017 confirms that nondisclosure payments like this are taxable.

Let’s not forget: what took down Al Capone wasn’t murder—it was tax evasion.

So again, if Belinda were our client, we’d be telling her loud and clear: this is income, not a gift. Why? Because Greg wanted something in return—her silence. That disqualifies it as a gift under tax law.

Bottom line: Be to the Linda should be on the phone with her CPA right now. And if she moves back to her home state of Hawaii, her combined federal and state tax bill on that $5 million is going to be $2,428,369. That’s 48% of her windfall—gone.

And that’s why, my friends, whenever you accept a bribe, kickback, or any other “bonus” like this, you better call your CPA to help you plan. I am kidding, dont accept bribes or kickbacks, we dont want you . But imagine leaning this shitty lesson on April 14th.