The first football game that my kids ever attended was a Penn State football game. They now own Penn State jerseys and Nittany Lion pillow pets. They’ve been tailgating in Philly (when PSU played Temple) and in State College. They’ve clamored over the Nittany Lion statue and eaten at the Creamery, brunched at the Corner Room and traipsed over to Old Main. They’ve yelled together with the Penn State cheerleaders and watched the Blue Band take the field.

For them, Penn State has always been a wonderful place where kids can be kids.

We all know by now that hasn’t been the case for every child. The allegations of the horrors committed by former Penn State defensive coordinator Jerry Sandusky – and the cover-up that followed – have made headlines across the world. It’s been hard for any of us to understand. I found it especially difficult as a mom to explain to my 9 year old daughter, who is the same age as many of the victims identified in the indictment, why the Philadelphia Inquirer featured Penn State with JoePa was on the front page when it wasn’t game day. (For the record, the discussion that followed focused not on the specifics of what happened but on the importance of telling the right people if you see someone being hurt.)

The resulting fallout and an investigation that seems to grow wider and wider by the minute has been tough for many of my friends in Pennsylvania. Like the network of colleges in my home state of North Carolina, there is a lot of pride in the greater community across the state that has put its faith and its money in a state funded public university. Here, Penn State is thought of as THE Pennsylvania State University. The sheer number of alums and others with connections to the university is staggering.

I have refused to jump on the bandwagon that says that those folks are not entitled to their feelings because they aren’t a victim of the scandal. While I agree that the real victims are those little boys and their families at the heart of this tragedy – and they are those that we should focus on and hold in our hearts – I firmly believe that those who were misled by those that they trusted should also be allowed to mourn and be sad. It’s not about football or JoePa or national championships. It’s about a lie. A lie that was bigger than almost any of us could imagine.

I also understand why they’re angry. And in Pennsylvania, many are about to become more angry.

The Harrisburg Patriot-News, the top newspaper in the state’s capital, has reported that Sandusky will continue receive an annual pension of $58,898 from the State Employees Retirement System (SERS). This is in addition to the $148,271 that he collected in a lump sum when he was quietly forced out retired in 1999.

Those attached to the scandal will also likely receive top dollar. Gary Schultz, accused of participating directly in the cover up, received a lump sum of $421,847 in 2009 (after the investigation began) and will collect a whopping $331,000 a year in pension. That works out to a monthly (yes, monthly) pension worth $27,558 – or nearly four semesters of credits for a resident Penn State freshman.

According to the Patriot, former Athletic Director Tim Curley and former Penn State President Graham Spanier were not members of the state pension system though Curley, who is on administrative leave at his own request, continues to draw a taxpayer-funded salary.

SERS is a statewide retirement plan for public employees; as a result, benefits paid out from the plans can be a mix of deferred compensation, state funded contributions and investment earnings. As a public university, Penn State receives a sizable amount of funding from the Commonwealth. In 2010, funding from taxpayers was at $334 million; that number was reduced to $165 million after Governor Tom Corbett (R) took office.Similar Posts:

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The line judges may call the shots on the court but it’s clear that Spanish tennis star Rafael Nadal is calling the shots off the court. The world’s second-ranked men’s tennis player has announced that he will not play the Queen’s Club tourney next year in Britain, citing that country’s tax laws as a deterrent. Instead, he says, he’ll play in more tax friendly Germany that week.

Queen’s Club is considered the warm-up to Wimbledon. Nadal has played in the tourney almost every year for the past six years; he had to bow out in 2009 due to injury. But this year, he worries that he will lose money if he plays Queen’s due to Britain’s tax laws.

The Brits, like the US, attempt to tax global income. However, under British tax law, the amount of tax due is pro-rated based on the number of events that an athlete competes in; this is in addition to a 50% tax rate on appearance fees. If, for example, Nadal participates in ten tournaments in 2011 and one of those tournaments is located in the UK, the Brits take the position that they are more or less entitled to 1/10 of Nadal’s worldwide income (some exceptions apply but you get the idea). The tax is imposed even though the athletes, like Nadal, may not live in Britain.

Clearly, the law isn’t popular. It has kept big names like Spanish golfer Sergio “El Nino” Garcia and Jamaican sprinter Usain Bolt out of the country for nearly every event. In fact, Bolt has indicated that he will only race in Britain for the Olympics – and not any of the matches leading up the Olympics – which sent Britain’s Tax Minister scurrying for a fix. In fact, in order to ensure that athletes actually show up for the 2012 Olympics, the British taxing authorities have agreed to a limited exemption to the tax rule.

In the past, the tax office has also considered a special tax break for the purposes of luring Tiger Woods to the country (though not so necessary these days, huh?) for the Ryder Cup. It wasn’t the only concession the taxing authorities considered: after Wembley was passed over as the host for the 2010 Champions League final, changes were made to exempt visiting footballers (that’s soccer to you and me) from the tax laws. As a result, Wembley hosted the 2011 Champions League final on May 28 of this year in which Barcelona competed (and won) against Manchester United. It was the first European Cup final held in the new Wembley stadium.

Will UK make such an exception for Nadal? The pressure is on but so far, there’s no indication that anything is seriously being considered. Of course, tennis fans need not totally despair: Nadal isn’t boycotting Britain altogether. He has announced that he will indeed play Wimbledon and the ATP World Tour finals, both of which are held in Britain.Similar Posts:

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So wow.

I hope you stayed up last night – like I did – to catch those baseball games. And by those baseball games, I mean a set of four baseball games that made up what was possibly the greatest night in baseball regular league play. If you didn’t catch it, I highly recommend you click on over to Sports Illustrated and check out some highlights. I’m warning you now, though, that it will be impossible to pick the most gasp inducing moment… Hunter Pence’s bullet home to catch Uggla? Evan Longoria’s walk-off homer in the 12th inning? Scutaro’s inexplicable stop and go in the 8th inning?

It was an amazing night for baseball, no matter who you were rooting for. My beloved Phillies had already captured the division and their play-off spot (they were gunning for a franchise record 102 wins – which they totally clinched, thank you, Charlie Manuel) – and managed to make the game a heart-stopping 13 innings nonetheless. The Cardinals beat up on the Astros early and then they waited to see if they would play another day (literally, a “play in” game with the Braves was on the line). The Rays came back from a 7-0 deficit to stun the Yankees in the 12th inning. And a wild 9 innings in Baltimore lead to Boston’s ouster until next season.

Crazy. Unpredictable. Electric.

And it means that there are a lot of bleary-eyed baseball fans this morning. Some spent last evening cheering wildly, others crying in their nachos wondering how a “sure thing” got away.

I’m also guessing that there was more than a little bit of money riding on some of those games last night – for purely entertainment purposes, of course. Now that the madness has settled a little (just a little), it might be time to figure out how to report those winnings and – I’m sure more than a few – losses.

(You remembered this is a tax blog, right, even if written by a slightly delirious Phillies fan?)

So here’s the scoop on taxes for casual gamblers – in other words, those of you who are not professionals.

You have to report your winnings from gambling even if it comes from your neighbor or the office pool. Just because it doesn’t come from Harrod’s or a shifty looking man who runs his “operation” out of his car doesn’t mean that it’s not reportable for federal income tax purposes. And legal or not, it’s reportable.

In terms of mechanics, you report your winnings on a federal form 1040 (downloads as a pdf) on the oft-neglected line 21, other income. There’s no such line on the form 1040-EZ (sorry).

If you receive a form W-2G, Certain Gambling Winnings, you report the amount in box 1 on your form 1040, line 21 (again, no form 1040-EZ). If you had any federal income tax withheld, you’ll also see an amount in box 2: include that amount on line form 1040 at line 61.

But I’m guessing that more of you are interested in gambling losses this morning… You can only claim gambling losses if you itemize deductions on your Schedule A – it’s considered a miscellaneous itemized deduction not subject to the 2% limit. I know. So it feels like you lose twice if you don’t itemize. Sorry, I don’t make the rules, people.

There are some more rules that relate to gambling losses. You must be able to document your losses by type of loss, date, name and location of the gambling establishment and amount. You’ll want to keep a diary or similar record (a spreadsheet should also work) and be able to provide receipts, tickets, statements or other records showing your losses. Since you and I both know that Vinny isn’t going to give you a receipt – nor the obnoxious winner at the bar where you lost – try your best to secure some decent, contemporaneous record of your loss.

And finally, you cannot deduct more in losses than you report in winnings. Hopefully, this isn’t a problem that you have often.

If you’re having trouble figuring it all out, make sure that you check with your tax professional.

Money on the game or no, be sure and tune in this October for baseball. The race for the World Series promises to be one of the most entertaining in years. Of course, I’m hoping my Phils bring the trophy home (my 7 year old would really like another parade, guys) but anything can happen. That’s why we keep watching.Similar Posts:

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Are you ready for some football?

Preseason is in full swing already for the NFL and yet all anyone can talk about in the football world is college football. Specifically, the chatter is centered on the University of Miami. Yes, Miami.

Unfortunately for the Hurricanes, the talk focusing on Miami has little to do with the current season or the current players. Instead, it’s about Nevin Shapiro, a 42 year old former University of Miami football booster, who is currently serving a 20 year sentence in federal prison for running a Ponzi scheme (a la Bernie Madoff) worth nearly a billion dollars. That kind of money can buy you a lot of friends. And allegedly, while Shapiro was a University of Miami booster, he bought a lot of friends – up to 72 of them in the way of University of Miami athletes including such names as Jon Beason (now a Carolina Panther), Devin Hester (now a Chicago Bear), Willis McGahee (now a Denver Bronco), Antrel Rolle (now a New York Giant) and Vince Wilfork (now a New England Patriot). Shapiro allegedly bankrolled the lifestyles of these young athletes by giving them cash and jewelry and entertaining them with hookers; he is said to have even purchased a yacht to hold sex parties for the athletes.

The allegations are pretty serious.

The worst part? They’re also not totally unbelievable.

The NCAA has been dodging a number of charges lately about questionable conduct from boosters and supporters. Most famously, after a lengthy and disturbingly quiet investigation, the NCAA found that Reggie Bush (now with the New Orleans Saints) received improper benefits while at USC, leading to sanctions against the university. Last year, Bush also gave up his Heisman Trophy to keep his endorsements to make people like him as a public display of regret.

Shortly thereafter, Ohio State Coach Jim Tressel was forced to resign among allegations that his players received free tattoos and other perks from a local tattoo parlor.

Other football teams have been investigated for similar charges, including Auburn (where players admitted accepting money from boosters) and LSU (where a coach paid a player to transfer). Scouting and recruiting scandals involving cash and other perks have also been reported at Oregon and Georgia Tech.

With that, the University of Miami scandal just seems like the next notch on the NCAA’s dirty bedpost.

It used to be different. College ball used to feel like it was all about the love of the game. College athletics seemed like an opportunity for some kids go to school, play a little ball and get an education.

But now, not so much. Now, many college sports programs – especially football and basketball – feel less about education and more about industry. College sports programs are a money-maker for colleges and increasingly, apparently, the players and coaches.

Don’t believe me? Ask the coaches. In 2009, Connecticut basketball coach Jim Calhoun grew testy when asked by the press about his own $1.6 million salary, which represented more than 13 times the average salary of a tenured professor at the school (chart downloads as pdf). Calhoun grumbled:

Quite frankly, we bring in $12 million to the university… We make $12 million a year for this university. Get some facts and come back and see me. … Don’t throw out salaries and other things. Get some facts and come back and see me. We turn over $12 million to the University of Connecticut, which is state-run. Next question.

More numbers? Ohio State University spent over $77 million on its football program alone last year, according to figures from the U.S. Department of Education’s Equity in Athletics. Last year’s BCS winner, Auburn, came in just under, at $71 million. And the dollars pour in just as easily as they are paid out. Football and basketball programs combine for nearly 75% of the $5,002,206,503 in revenue brought in by college athletic programs in public universities.

That’s a lot of money. And it’s federal income tax-free. In fact, because of the tax-exempt designation for college athletics, nearly all of the revenue, including that generated by ticket sales, television deals, bowl games and corporate sponsorships flows tax-free.

It looks like a business. It smells like a business. But we won’t call it a business. We won’t because we’re still buying into the fiction that these programs are somehow an integral part of the academics at these schools. So we call it a charity.

But consider this: while SAT scores now range from 600 to 2400 for college students, the NCAA allows athletes who score 820 (downloads as pdf) to participate in Division II programs so long as they maintain a C average. In some cases, the cost to provide private tutors and academic “assistance” to athletes to maintain standards climbs as high as $100,000 per student athlete. In other instances, programs cheat counsel their athletes in order to make sure that they can still make kickoff (yes, I might be talking about you, UNC-Chapel Hill), not so they can earn a degree. The result? Jim Delany, commissioner of the Big Ten since 1989, told the Philadelphia Inquirer:

We’re definitely in the entertainment business, and I think we have been for a long time.

Entertainment, not education. Not that there’s anything wrong with that. In the abstract, that is. In fact, I happen to love watching college sports. I’ve been a fan of college basketball ever since I can remember; the ACC basketball finals marked the one Sunday you could rest assured that the sermon would be short at church. And since moving to Pennsylvania, I’ve quickly learned that you can’t plan anything on a weekend during football season without conflicting with Penn State football tailgating.

It’s good fun. It’s a game – a game that makes a whole lot of money for a whole lot of people. And there’s nothing wrong with that. I just happen to believe it’s not a tax exempt purpose.

I’m hardly alone. Critics have been pushing Congress to consider this issue for a bit. Over the past few years, the result has been a ridiculously half-hearted inquiry into the tax-exempt status of athletics programs at colleges and universities in light of accusations that they are little more than pro-sport training camps. So far, there’s been nothing but the exchange of a few letters.

In the meantime, college sports programs continue to court donations that aren’t remotely about education or charity.

Maybe it’s time to call it what it is: a business. And if college sports are in business to make money, those programs shouldn’t be tax-exempt.

Maybe we should take it one step further and give college sports an Olympic style makeover. If college sports really aren’t about promoting amateur athletics (a clear tax exempt purpose) and really are a business, let’s also – gasp – relax the rules on paying athletes. Because if it’s really all about the kids, maybe the kids should get a benefit beyond what is, in many instances, a bogus education. Maybe instead they should be rewarded for their contributions to the schools.

Please don’t misunderstand my position here. I really don’t want schools to be farm teams for the big leagues. I want them to be schools. But I am also realistic. The system is clearly in need of a fix. Like it or not, the Nevin Shapiros of the world are here to stay.

College sports was never supposed to be about the money. And maybe somewhere there are still some kids playing because they like to play. And maybe there’s a coach that will just let them do it. But the money is not going away. And money will change the game.
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When LeBron James hits the court in Nike apparel, does it make you like Nike more or less?

What about David Beckham wearing (sort of) Armani underwear or Adidas sportswear?

Do those endorsements make you want to go out and support those brands? Major labels seem to think so, signing up a number of athletes, celebrities and reality “stars” (like the Kardashian sisters and Paris Hilton) to wear their clothes, model their extensions and flash their jewelry in exchange for cash. These endorsements can be the major source of income for some celebrities, eclipsing their actual pay, even though celebrity endorsements apparently aren’t worth what they used to be for the consumer.

The issue of endorsements – and their value – hit the Tax Court this week courtesy of South African born golfer Retief Goosen. Goosen filed a court challenge to the IRS’ assessment of his endorsement income (downloads as a pdf).

Goosen has lucrative endorsements for most of his golfing equipment. For example, he has deals that require him to use TaylorMade golf clubs and golf bags (owned by Adidas) and Titleist golf balls and golf gloves (owned by Acushnet) while wearing Izod apparel during play. Off the golf course, he endorses watches (Rolex), video games (Electronic Arts) and trading cards (Upper Deck).

On Goosen’s tax returns, he took the position that the off-course endorsements were classified as royalty income; the IRS agreed. However, Goosen also took the position that the golf endorsements were a mix of royalty and personal services. This was more tax advantageous to him than the IRS’ position that it was solely personal services income. Under the Tax Code, royalties are generally subject to more favorable tax treaty provisions; Goosen has a residence in England and as a non-domiciliary U.K. resident wanted to claim benefits under the U.S.-U.K. tax treaty. Personal services income is subject to regular U.S. income tax rates.

Goosen’s basis for his argument is that sponsors paid him for the right to co-market and co-brand their products with his name and image. Traditionally, courts have characterized these payments as royalties because the person has an ownership interest in that valuable right.

The IRS, however, took the position that Goosen was actually being paid for his services, namely playing golf and using their products. To support their argument, IRS pointed to the endorsement contracts Goosen signed which required Goosen to play in a certain number of golf games each year.

U.S. Tax Court Judge Kroupa ruled in Goosen’s favor on this issue, noting that Goosen’s “accomplishments on the golf course made him famous, though it was his image that made him marketable.” Judge Kroupa seemed to focus on the idea that Goosen’s image – that as a cool, collected golf player – mattered as much, if not more, than his ability to play golf. To support this notion, Judge Kroupa pointed to a morals clause in the contracts that required Goosen to maintain a certain image and penalized the golfer if he compromised that image; the opinion noted that image is extremely important in certain sports arenas, especially in golf. Of course, Tiger Woods was cited as example when it was noted that Tiger lost many of his sponsorships after his series of affairs not simply because his game declined (which it did) but because “sponsors determined that Mr. Woods’ image was no longer compatible with their products.” In other words, image matters, and Goosen’s contracts contributed to the idea that a certain image matters, at least in his case. And as a result, the court agreed with Goosen that income received from those contracts could be classified as half royalty income and half personal services income.

Goosen, however, didn’t win the entire round. While Goosen and the IRS both agreed that personal services income, tournament bonuses and ranking bonuses should be considered US sourced, they disagreed as to what portion of the royalty income from endorsement fees should be considered US sourced.

Generally, royalty income which is paid for the right to use intangible property (such as a likeness) is sourced where the property is used or is granted the privilege of being used. The courts can look to an allocation source inside a contract but in Goosen’s case, Judge Kroupa determined that the allocation wasn’t specific enough (the contract used the term “worldwide” to refer to non-UK sources and it wasn’t narrowed further). That means that the courts have to look to outside evidence. That evidence wasn’t favorable to Goosen. In the case of the trading cards, for example, Upper Deck sold 92% of its golf cards in the U.S. The video games that Goosen endorsed had a U.S. market share of 70%. While purchase statistics don’t always indicate the value of an intangible party in the U.S., they can be indicative of the allocation. In the case of the cards and video games, Judge Kroupa noted that they were primarily marketed inside the U.S. as opposed to globally. Thus, those sales percentages were held to represent the actual U.S. source income. With respect to the Rolex and “on course” royalty fees (as noted above), the court found it reasonable to attribute 50% as U.S. source.

Goosen also lost his bid to have all of his income subject to the terms of the U.K./U.S. tax treaty. Goosen routed some of the income directly to the tax-friendly state of Liechtenstein rather than to his tax home in the U.K. Based on the evidence, Judge Kroupa held that Goosen “has not shown that he is eligible for any treaty benefits.”

So what does all of this mean going forward? I think it signifies a few things:

1. Image matters. Not just on camera but in Tax Court.
2. Contracts need to be specific. Despite the fact that we sometimes act like we own the world, we don’t, so “worldwide” does not equal U.S.
3. You can’t do one way what you can’t do another. I know, double negatives. But you and I – and Judge Kroupa – all know why Goosen chose to be paid in Liechtenstein. It’s either U.K. income or it’s U.S. income under the facts as presented. If you’re going to argue that it’s neither, then no treaty applies.
4. Finally, athletes and stars all over the world who do business in the U.S. are calling their tax lawyers right now. Or at least they should be.

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Today marked the 27th running of the TD Bank Philadelphia Men’s International Cycling Championship, the longest running single-day cycling road race in the United States. I happen to live pretty close to the most (in)famous part of the race, the Manayunk Wall. It’s a half-mile climb at a steep 17% grade and the cyclists have to make that climb ten times before finishing up with three laps around Lemon Hill and Logan Circle. When all is said and done, some of the world’s greatest cyclists will have logged 156 miles through the City of Brotherly Love.

It’s a pretty big deal for a city that loves its bikes. In addition to the numerous bike paths for fun, Philadelphia is a big bicycle commuter city, joining the likes of Boulder (CO), Cambridge (MA), Portland (OR), San Francisco (CA) and Minneapolis (MN) as top commuting cities. Those cities don’t stand alone: bicycle commuting is picking up steam all over the country. Congress finally acknowledged the trend in 2008 by including bicycle commuting expenses as excludable fringe benefits for employees under Section 211 of the Emergency Economic Stabilization Act of 2008 (you and I are probably most familiar with the law as “the bailout bill”).

Fringe benefits are sometimes thought of as perks. Perks or benefits are generally taxable unless they’re otherwise excluded. As of January 1, 2009, the exclusion from taxable income applies to qualified bicycle commuting reimbursement. However, it’s not as simple as it sounds. The rule is that you can usually exclude qualified transportation fringe benefits from wages even if you provide them in place of pay (Code of Federal Regulations section 1.132-9(b)(Q&A 11-15)) but that doesn’t apply to qualified bicycle commuting reimbursements: those may not be excluded from taxable income if provided in place of pay.

But assuming you get over that hump, the exclusion includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred during the calendar year. Reasonable expenses may include the purchase of a bicycle and bicycle improvements, repair, and storage. The key is that the bicycle must be used for regular commuting (meaning between where you live and where you work). It’s a lot less than other transportation benefits ($115 for monthly transit or $210 for monthly parking) but it’s a nod in the right direction.

The amount that can be excluded in a calendar year is limited to $20 times the number of qualified bicycle commuting months during that year. A qualified bicycle commuting month is any month in which you regularly used your bike to commute and you did not receive other reimbursement benefits for transportation in a commuter highway vehicle, a transit pass, or qualified parking benefits.

Of course, you may receive benefits that exceed the exclusion. The consequence is that you would then include in your wages the amount over the benefit.

Self-employed persons are not considered employees for purposes of the exclusion. The exemption also does not apply to S corporation employees who are 2% (or more) shareholders or to partners. There are additional exclusions and restrictions under the law so check with your tax professional if you have questions.

The total benefit per year can’t exceed $240. Those kinds of dollars aren’t going to offset the kind of bikes ridden by this year’s ICC men’s champ Alex Rasmussen and other cyclists on the circuit but it should help you get to and from work on a nice road bike.Similar Posts:

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We have a winner! See the correct answer in the comments. Also see this prior post.

Our next tax trivia question for the giveaway is:

In 2010, Rep. Joe Barton (R-TX) was instrumental in asking IRS to “thoroughly examine” a tax complaint filed against three college football bowls. Name all three.

The first correct answer wins free free CompleteTax online tax prep software.

Remember that you have to comment on the actual post, not on email, Twitter or Facebook, in order to win (though feel free to comment that way for fun). You can read the rules for the giveaway and more about the prizes here.

What’s your guess?Similar Posts:

None Found

Some folks think that football is just a game. In many parts of the country, those folks would be wrong. In the South (and indeed in other places around the country like State College, PA), football has assumed a level of importance right next to God; in fact, we often joke in the South that football is a religion. And as you know, religion and politics don’t mix.

It’s not surprising, then, that the latest strike in the Bowl Championship Series (BCS) fiasco is lead by a Southerner. Rep. Joe Barton (R-TX) is leading the charge to have the Internal Revenue Service “thoroughly examine” a tax complaint filed against three premier college football bowls. Barton is no fan of the current system and has previously described the BCS as “like Communism: You can’t fix it.” Barton is so passionate about the issue that he has actively championed a change to the BCS, even sponsoring federal legislation to force college football to switch to a play-off system to determine the national championship (closer to say, how college basketball does it).

The tax complaint in question has been brought by Playoff PAC, which describes itself as “a federal political committee dedicated to establishing a competitive post-season championship for college football.” The complaint was filed with the IRS complaint against the Fiesta, Sugar and Orange Bowls (the Rose Bowl and the BCS title game were not included in the complaint). The three bowls have been accused of violating their tax-exempt status by engaging in a number of prohibited behaviors including paying excessive salaries and lobbying.

Barton issued a letter to IRS Commissioner Doug Shulman, urging him to take the complaint seriously. The letter was also signed by Reps. Cynthia Lummis (R-WY); Gene Green (D-TX) and Jason Chaffetz (R-UT). The letter said, in part:

As public charities that take in millions of dollars each year, they receive significant tax exemptions and benefits that must not be abused… We therefore ask that you act on our request and thoroughly examine these troubling claims.

The IRS, of course, would not comment on the matter. The Fiesta, Sugar and Orange Bowls did not respond publicly to the most recent charges.

This isn’t the first time that the tax-exempt status of college sports have been called into question. The NCAA has been under scrutiny for the past couple of years with respect to its finances. The salaries paid to sports coaches, employees of tax-exempt organizations, have also made news – the clamor to learn the “secret” of Joe Paterno’s coaching salary reached the Pennsylvania Supreme Court.

This latest call is, however, a departure from the normal arguments against the tax-exempt status of college sports. This is clearly more of an effort to effectuate a certain position (re-engineering those darn playoff games) than what should be the goal of a taxpayer complaint against a tax-exempt organization (parity and fairness in the tax-exempt system). In fact, I would argue that this strike against the Bowls, even if you really hate the current bowl system, has the potential to really hurt college football more than help. My guess is that if IRS actually looked hard at most college football programs, they’d find a lot of the kinds of behaviors alleged in this complaint.

With the increased focus on these programs, the odds of college sports coming out of this completely unscathed: not a prayer.

Technorati Tags:
tax-exempt status, football, BCS, Joe Barton, Playoff PAC, Fiesta Bowl, Sugar Bowl, Orange Bowl

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All of that fuss over Usain Bolt and now he has a back issue?

Thank goodness he’s not the only mega-rich athlete thinking of playing in the UK these days or the British government might get bored. Now, they’re in talks with European Tour officials about the current tax structure because of noise on the golf circuit about how expensive it is to play in Britain. Michael Platts, the Tour’s director, has said, “These tax rules are discouraging leading sportsmen and sportswomen from competition in Britain.”

And by leading sportsmen and sportswomen, they mean Tiger Woods. Let’s not kid ourselves here. Read on.

Platts went on to say, “Our aim is to attract the best players to provide the best entertainment for our audiences in the U.K. This tax rule is seriously hampering our efforts. Discussions continue to take place with the HMRC and these discussions include the Ryder Cup.”

Reports now indicate that the discussions are that the Ryder Cup would be exempt from the current tax law. Hmm. The Ryder Cup… And that’s making news now, why?

If I had to bet (and I’m not a gambling girl), I’d say that the emphasis on the Ryder Cup is directly related to the golf soap opera that is Tiger Woods. Let’s face it… die hard golf fans have always watched golf on TV. I have a father-in-law who can pretty much back that up (as well as having witnessed some Sunday afternoons at his house myself). But the dabblers watched for the spectacle that is Tiger Woods. And as that spectacle starts to crumble a little, with Tiger threatening not to even make the cut of much PGA play, the golf world is a little bit worried that “every man” won’t watch golf without Tiger. That’s why Tiger playing in the Ryder Cup – even though he is clearly not the best choice right now – is so crucial. Golf, with Tiger, is popular. Golf, without Tiger, not so much.

That also might explain why Corey Pavin said, about Tiger playing in the Ryder as a Captain’s Choice, “Of course I’m going to [pick him]. He’s the best player in the world.” Pavin, in a tweet, later claimed he had been misquoted.

The reality is, however, that Tiger brings an audience – something the golfing world doesn’t want to lose. But at what price? The UK tax system has been heavily criticized by many athletes because of its burden on non-citizen athletes. The UK tax authority, the HMRC, has defended its position noting that the US and Australia have similar tax systems. That argument is, however, not likely to impress US athletes who have seen that the UK is willing to budge on taxes if it means a spectacle (the Olympics come to mind, as well as the Bolt race, as mentioned earlier). The HMRC said, about the tax, “It is only right that where someone comes to work in the U.K. and receives an income, that tax is paid on that income, where it is due. Only the money the sports star earns in the U.K. that is connected to their performances in the U.K. is taxed.”

But then the HMRC may underestimate a culture where the very rich move to avoid taxes in the first place (remind me again why Tiger lives in Florida?).

However, what can’t be disputed is that some athletes attract a level of attention to events that can’t be ignored. It does make you wonder: is it fair? Should athletes and other celebs get tax breaks in exchange for bringing notoriety – and hopefully, extra money – to a particular event?

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UK, Usain Bolt, Tiger Woods, Ryder Cup, golf

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In case you missed my piece about Steinbrenner over at Walletpop:

Steinbrenner’s final win — over estate taxes

(Yes, even a Phillies fan can respect Steinbrenner’s legacy.)

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