Abbott & Costello Raising Money In Los Angeles – 1942

The Government Later Shows Their Gratitude With An IRS Audit

Bud Abbott and Lou Costello were the number one box office stars in 1942, so who better to go out and rouse the public to buy War Bonds?

The United States entered World War II after Japan’s surprise attack on Pearl Harbor, December 7, 1941. Abbott and Costello were too old to serve in the armed forces, but they would do their part to aid the war effort.

The comedians each donated their $10,000 weekly personal appearance salary to the Army and Navy relief fund. Traveling the country, the duo would make 47 speeches in 22 states during a 38 day tour. They would raise over $85 million in War Bond sales.

At one bond rally in Washington D.C. Costello screamed to the crowd, “Money don’t mean a thing if you haven’t got that swing, and we’ll all swing by the necks if Hitler comes over.”

The pair also wanted to directly help those serving in the armed forces.

Neither Abbott or Costello could dance a step. But they knew that that many soldiers were shy and didn’t know how to dance and would never attend a U.S.O. dance. Abbott and Costello paid for an instructor and 100 girls to give dancing lessons to U.S. servicemen in Glendale, CA..

Lou Costello – “A Real Human Being”

Here is a slight indication of the sort of person Lou Costello was. Private Edward J. Healey wrote this story that appeared in Ed Sullivan’s (yes, the future TV host) New York Daily News column on June 7, 1942.

Dear Ed: At present my company is on maneuvers in the desert in California, approximately 175 miles from Los Angeles. After taking the heat and all the other inconveniences found on a desert, I was allowed a weekend pass after a month of maneuvers. Together with another fellow from my company we went to Los Angeles (by thumb). Arrived Saturday night and put up at a reasonable hotel, where we had our first hot bath in over as month. On Sunday. after Mass, I thought about visiting Hollywood and wandered if one of my favorites could be seen—Lou Costello. I called the studio and asked them to contact him and to explain that I was from his home town, Paterson, N. J.. and in L. A. on leave. Lou immediately called back. asked my location and dispatched his car and chauffeur to pick us up.

Well, Ed. he surely showed us a swell time. No one could have done any more for us. From swimming in his pool to being to the first row, at his broadcast. Ed you’ll never know how much my pal and I enjoyed ourselves. I’d like more people to know what a real human being this Costello is, and how the team of Abbott and Costello has reacted to success. I have read your column for years. My grandmother’s name was Sullivan and from County Kerry, so I feel qualified to ask a favor of you. PVT. EDWARD J. HEALEY. H. Q. Co., Camp Young, Indio, Calif.

Can you imagine a celebrity doing something like this today?

Payback

So how did the government eventually return Abbott and Costello’s patriotism and generosity?

Lou’s daughter Chris Costello in her book Lou’s On First (St. Martin’s Press) 1981, tells of the government’s form of repayment.

The pair had each earned upwards of half a million dollars a year for a period of at least a dozen years. Those high earnings put them in the 90% tax bracket. During their career Bud and Lou gave and spent freely, relying on their accountants, never checking the books. Some dishonest and loose accounting by those they trusted would lead to their downfall. The Internal Revenue Service eventually got their hooks into Abbott and Costello.

In the 1950s Bud Abbott and Lou Costello were brought to the attention of the IRS by a man named Fisher. “He had some connection with one of our attorneys and for whatever reason had information that not even Bud or Lou knew about and decided to do them in,” Chris Costello says.

The IRS wanted to make an example of the famous comedy team so that other high earners would take notice.

When the IRS completed the audit, penalties and interest were added on until the total bill amounted to around $750,0000 each for Bud and Lou. Though Bud and Lou completely cooperated with the audit, the government would not cut them any slack. The IRS would loom over the comedians for the rest of their lives.

Lou sold his home, his health declined and he worked less often.

The pair split up in 1957 and Lou Costello died of a heart attack on March 3, 1959 at the age of 52.

The audit cost Bud Abbott his entire life savings, his home and even the rights to his films which he sold for $100,000.

Abbott felt he had been unfairly treated but did not go to court. “I can’t afford those high-salaried attorneys,” he said.

Completely broke, Bud Abbott suffered a series of strokes in the 1960s and died of cancer, April 24, 1974 at the age of 78.