Comments on: Bill Belichick feels “fine”?

By: The Business of Being Lindsay | taxgirl

The Business of Being Lindsay | taxgirl — Mon, 07 Nov 2011 00:23:54 +0000

[...] These matters are so fact and circumstances dependent that it’s impossible to give a thorough answer without knowing more information. But it does make for fun cocktail party conversation, especially among the tax geek set (just as it did with respect to Belichick’s cheating scandal). [...]

By: Ask the taxgirl: Big Ben Tax Consequences | taxgirl

Ask the taxgirl: Big Ben Tax Consequences | taxgirl — Thu, 22 Apr 2010 15:14:46 +0000

[...] taxes. The analysis here would be similar to the Belichick “cheater cheater” situation. While I felt that Belichick’s fine was neither “ordinary” nor “necessary”, many of my readers [...]

By: Miki

Miki — Sun, 23 Sep 2007 22:33:17 +0000

Scott, The part I find bizzare isn’t deducting the fine, but that the act of cheating is considered normal business practice.

Kelly, I know you said that you’re looking up state and local gov’ts, but what I really want to know is does it apply to foregin gov’ts? Specifically, the fines being levied by the EU.

By: Kelly

Kelly — Wed, 19 Sep 2007 00:10:10 +0000

Pretty much spot on, Miki. Sad, huh?

I believe the prohibition against deducting fines paid to the government extends to state and local. The cite is 162(f) – I’ll have to check it out.

By: Miki

Miki — Tue, 18 Sep 2007 18:18:08 +0000

OK, just want to make sure that I understand this.

It’s OK to cheat and I can deduct any financial penalties from getting caught as long as the fining body isn’t part of the government.

In other words, cheating is OK and a normal part business if it doesn’t involve governmental bodies.

Is that ANY governmental body or only Fed gov’t? Does it apply to foreign gov’t bodies?

Finally, does it mean that Microsoft can deduct the $613 million EU fine from it’s US taxes?

By: Scott Allen

Scott Allen — Tue, 18 Sep 2007 16:48:08 +0000

Define “ordinary”. Does Bellichick have to pay that particular fine every couple of years? Let’s hope not. Do athletes, coaches and owners as a whole have to pay fines to the leagues frequently as a normal course of doing business? Absolutely. If a player can deduct their $5,000 fine for cussing during a game, then Bellichick can deduct this.

And as others have stated, it’s a requirement of his livelihood. If he didn’t pay it, would he be able to keep coaching an NFL team?

By: Fred Daily

Fred Daily — Tue, 18 Sep 2007 00:16:29 +0000

I think David has hit the nail on the deductibility head–it is a “necessary” expense for Bellichick’s livelihood.

And, under the second part of the statute, it may not be an out the “ordinary” expense for someone in the peculiar world of professional sports.
Prediction: This is a game that the coach will win if it ever gets to court.

By: David

David — Mon, 17 Sep 2007 23:28:43 +0000

It should be deductible since it was incurred in the course of his employment, and it IS a necessary expense in that, if he doesn’t pay it, he will be barred from his livelihood.

By: Miquela

Miquela — Sun, 16 Sep 2007 02:56:39 +0000

Not to sound negative because I’ve racked my brains looking for a loophole but it’s too public. Even if he were to find a loophole (business expense, personal loss or the like) the goverment, I’m sure, has put a red flag on him. Like Mr. Catch-Barry-Bond’s-Baseball. They’re just itching to get their share.

By: Kelly

Kelly — Sat, 15 Sep 2007 19:14:53 +0000

Fred – I agree re 162, as mentioned above, but do you think it’s “necessary” and “ordinary” – in other words, is cheating now a legit part of the NFL?