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Famous Tax Cheats: Pete Rose, Baseball Player

Kelly Phillips ErbApril 18, 2015October 17, 2020

Peter Edward Rose, one of the most famous faces in baseball, turned 74 last week. He still holds more records than any other player in the history of the sport. You’ll find his name plastered all over the record books but not where it matters most to him: the Baseball Hall of Fame. Why not? To hear Rose tell it, “I chose the wrong vice.”
Rose was born April 14, 1941, in Cincinnati, Ohio. As a child, Rose played both football and baseball. He eventually switched over to baseball full time after not making the varsity football squad. That turned out to be fortuitous: shortly after his graduation, Rose signed with the Cincinnati Reds.

Known for his phenomenal hitting record, Rose started his career at 0-for-11. His first major league record would be a triple against the Pittsburgh Pirates, a day shy of his 22nd birthday in a season that saw him named National League Rookie of the Year.

Rose would eventually improve his record as a hitter and as a versatile player. In 1975, Rose led the Reds to a World Series win against the Boston Red Sox and was crowned the World Series MVP. The Reds would duplicate that feat the next year.

Rose took his winning ways to another team when, at age 37, he signed a four-year deal with my own Philadelphia Phillies. That deal made Rose the highest-paid player in baseball. The Phillies thought it was worth it: in 1980, in his second season with the Phillies, Rose would win his third World Series (it was the first for my Phils).
After Rose’s contract ended, Rose moved on to the Montreal Expos – but not for long. He made a brief return to Cincinnati Reds where he doubled as a player and a manager. While a Red, Rose made base hit number 4,192, passing the great Ty Cobb.

Rose would go on to play in 1,972 winning games from his start 1963 to his retirement in 1986, more than anyone else in professional sports. By the time Rose finally hung up his glove, Rose had 4,256 hits, 15,890 plate appearances, 14,053 official at-bats and got on base 5,929 times: he’s still tops in those categories. At retirement, he had won the World Series three times, played in the World Series six times and made 17 All-Star teams.
Despite those records, Rose has never make it to the Hall of Fame. Allegations arose that Rose bet on baseball. The Dowd Report, issued in 1989, the official report of investigations into those allegations, concluded that Rose had bet on baseball, including 52 games involving the Reds when Rose was player and manager. With that, Pete Rose received a lifetime ban from baseball.

If 1989 was a tough year, 1990 was worse. Rose pleaded guilty to failing to report $354,968 in income from autograph and memorabilia sales and personal appearances for four years beginning in 1984, resulting in an underpayment of tax of $162,000. With the plea, the government dismissed a more serious charge of tax evasion related to an investigation for failure to report his gambling winnings. At the tracks, Rose allegedly handed a winning ticket to an associate to cash, saying, “I’ve paid enough to the IRS, why should I pay on my track winnings, too?”

Rose could have done serious time for the charges (each carried up to 3 years in prison) but caught something of a break when he was sentenced to just a five month prison sentence, was fined $50,000 and ordered to pay back taxes and interest. He was also sentenced to three months in a halfway house and 1,000 hours of community service.

Two of Rose’s alleged gambling associates didn’t fare so well. Thomas Gioiosa was sentenced to five years for cocaine and tax charges; bookmaker Ronald Peters was sentenced to two years on cocaine and tax charges. After Gioiosa’s release from prison, he told Vanity Fair that Rose not only bet on baseball, he bet on the Reds. Gioiosa also alleged that Rose used a corked bat and invested money in a cocaine deal (Rose’s agent calls those allegations not credible).

On August 8, 1990, Rose began his sentence at a federal prison in Marion, Illinois. He was released on January 7, 1991. A month later, Rose’s name was placed on the “permanently ineligible” list at the Hall of Fame. Rose’s name is the only name on the list.

Rose applied for reinstatement two times in the 1990s. Those applications were not seriously considered with many believing that it was because Rose would not publicly admit to betting on baseball.

In 2004, Rose published his biography, “My Prison Without Bars.” In the book, Rose admitted to having bet on baseball games, though he says that he never bet against his own team. He confessed, he says, to finally come clean and move towards reinstatement. But Rose hadn’t come completely clean about everything: in 2004, Rose was hit with a $973,693.28 IRS lien for the tax years from 1997 to 2002. He eventually paid the lien off.

Rose was hit with yet another IRS lien in 2012 for the years 2009 and 2010. Neither Rose nor the IRS would discuss the liens publicly.

Despite his repeated tax problems, Rose claims he’s paid back his debt to baseball. In March 2015, Rose applied again for reinstatement. If he’s turned down (again), chances are that “Charlie Hustle” as he came to be known, will try again. He’s said about his quest, “I never gave up as a player and I won’t give up as someone who wants to go to the Hall of Fame, because it’s the ultimate goal for a baseball player or a football player or a basketball player.”

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Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
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baseball, betting on baseball, Charlie Hustle, Cincinnati Reds, gambling, Hall of Fame, Major League Baseball, Pete Rose, Philadelphia Phillies, tax evasion

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