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IRS Special Agent Jeff Novitzky has a special interest in the hearing for seven-time Cy Young Award winner Roger Clemens. Novitzky has been at the helm of a five-and-a-half-year investigation into steroids in professional sports including drug use in Major League Baseball.
Novitsky had expected to hear testimony from New York Yankees pitcher Andy Pettitte, former Mets trainer Kirk Radomski, and former Yankee and Twins player Chuck Knoblauch at the congressional hearing earlier today. However, earlier in the week, Committee chairman Henry Waxman announced that the only folks who would take the stand would be New York Yankees pitcher Roger Clemens, former Clemens trainer Brian McNamee and Charlie Scheeler of former Senate majority leader George Mitchell’s staff.
The hearing will focus on allegations made in the Mitchell report (downloadable on the the MLB site as a pdf – be aware that it is 409 pages!) by McNamee that he injected Clemens with performance enhancing drugs.
Despite the hoopla, Clemens’ lead lawyer, Rusty Hardin has told the New York Times that it would be “brazen” and “unbelievable” if IRS Special Agent Jeff Novitzky attends the hearing.
“If he ever messes with Roger, Roger will eat his lunch,” Hardin was quoted as saying.
I’m not even sure what that means. Good ol’ Rusty, I suppose.
Clemens, for his part, continues to hammer away that “I’ve never used steroids or growth hormone.”
If the committee feels that Clemens is lying, he can be charged with perjury. If he isn’t, it will be up to the public to determine whether all is forgiven.
But in the midst of all of the this, why an IRS agent? The Department of Justice assigns an IRS agent to steroids cases because they often involve money laundering.
What do you think? Is he lying?
As a bunch of folks predicted, Barry Bonds’ record-breaking home run ball (756) will be sold at auction.
The fan who caught it, 21 year old Matt Murphy, says he can’t afford to keep it because of the tax consequences. He reportedly said that “several people told him he would be taxed on the souvenir” if he kept it. Maybe he’s reading the tax blogs – most practitioners, including me, believe the ball to be taxable at receipt.
Sotheby’s/SCP Auctions will handle the online auction. You can check it out at http://www.scpauctions.com; the auction will go on from August 28 to September 15. Also on sale will be Bonds’ 755th home run ball which was hit August 4 in San Diego.
There is a lot that is going to be written about that ball. You know the one that I’m talking about… 756.
You know that what could be considered a tax event is mainstream when you see it announced on ESPN. And yes, there it was on the ticker yesterday: What are the tax consequences to the winner of the baseball lottery?
Baseball lottery. It’s a pretty apt description, I guess. Millions of ticket holders hold out hopes of catching a home run ball – just ask my brother (he of both baseball and baseball card collections) – and this wasn’t just any home run ball. It was a ball that marked the breaking of a record. Sort of.
You see, this is the reason that I just can’t get excited about this post. And usually, anything that combines sports and tax is pretty exciting. But this? This isn’t a record. Records are milestones, achievements that matter. This was a manufactured, selfish plot to get a name in a record book. And yes, I’ll go so far as to say that I have every belief that this wasn’t an honest achievement – it was medically induced, steroid powered.
Bonds, to me, typifies a lot of what is wrong with professional sports. He didn’t do this for the love of the game. You didn’t hear him talking about what was best for the team. You didn’t hear him cheering his teammates onto a pennant or giving them words of encouragement. It was all about Barry. It was all about marking one up for himself.
And that’s why I can’t get all that excited about this ball and the tax consequences that could flow to the lucky guy who caught it. Cause to me, that ball is pretty worth this. It’s the equivalent of finding Milli Vanilli’s Grammy award – noteworthy only because of the sad circumstances that surround it.
Despite all of this, there will be a lot written about that ball and it’s worth in the press. There is already speculation about the tax consequences – is it income now or when it’s sold? I will give you my 30 second speculation on that… I think it’s income the second that he caught it. To use that lottery analogy again, the fan who caught that sport had an increase in wealth upon winning that lottery/catching that ball. And since this is an object that can clearly be sold immediately on the open market (experts are valuing it at $500,000), it is, for tax purposes, easy to ascertain the value.
I’m sure that there will be paper after paper written about the incredibly complicated tax issues surrounding the ball – how to value it, how to distinguish the income component from the capital gains component.. I just don’t want to give this event that kind of press on my blog. Catching the ball was significant. Hitting the ball? In my opinion? Not so much.
