In 1992, Newton filed for Chapter 11 bankruptcy to reorganize an estimated $20 million in debts, much of which was accumulated while suing NBC for libel; he claimed the network had reported that he partnered with the Mafia to buy the Aladdin. His bankruptcy declaration included a $341,000 Internal Revenue Service (IRS) tax lien.
By 1999, he was financially well off again. In August 2005, the IRS filed a lawsuit against Newton alleging that he and his wife owed more than $1.8 million in taxes and penalties.
One of Newton’s tax lawyers disputed that, saying, “We believe the IRS owes him money.”