If you are a football player who is ending their collegiate career to become a NFL player, you spend the off season putting in hours and hours of hard work to show off your talent to NFL scouts. On one day. Usually, one chance. We typically call that day "Pro Day".
If you are a tax preparer who is hoping to work with some of the most prestigious but complex clients you generally do the same. Put in hours and hours of hard work to show off your talent on one day. However, we call that day "Tax Day".
Those tax advisers who specialize in the taxation of professional athletes were no exception in this season's Tax Day. Several industry leaders got a chance to dust of their "trophy case" when they were featured in recent news stories. Below are summaries and links to all of the articles which featured professional athlete tax advisers.
While I encourage you to read all of these stories, I think the quote of a professional athlete interviewed in Erik Brady's story best summarizes Tax Day - and tax season - for professional athletes: "nobody knows what's going on."
Happy Tax Day everyone!
If you are a tax preparer who is hoping to work with some of the most prestigious but complex clients you generally do the same. Put in hours and hours of hard work to show off your talent on one day. However, we call that day "Tax Day".
Those tax advisers who specialize in the taxation of professional athletes were no exception in this season's Tax Day. Several industry leaders got a chance to dust of their "trophy case" when they were featured in recent news stories. Below are summaries and links to all of the articles which featured professional athlete tax advisers.
- Last Friday, Robert Raiola wrote a long-form article for Sports Illustrated which provided an overview on several specific issues faced by professional athletes. Among the issues Raiola discussed were an overview and history of the "jock tax", the importance of a taxpayer's domicile, and tax deductions not typically available to general taxpayers but available to professional athletes. Raiola, who is the Sports & Entertainment Senior Group Manager at O'Connor Davies, LLP, warned in his article that professional athletes who "[leave] tax planning as an off season checklist item could result in more work and missed opportunities for deductions."
- Also last Friday, Mary Pilon of the New Yorker magazine wrote an article which highlighted a similar "jock tax" overview, discussed current "jock tax" issues, and profiled the work of Mark Goldstick, CFO of sports agency Priority Sports and Entertainment. Among the issues highlighted by Pilon were Wisconsin's Governor, Scott Walker, attempting to fund a new Milwaukee Bucks' stadium with money from the "jock tax", and a court case regarding the "jock tax" that is currently pending before the Ohio Supreme Court. Pilon was kind enough to interview and quote me in her article on some of these current issues. In Pilon's profile of Goldstick, Mark shared "war stories" such as the need for him to frequently advise professional athletes against taking tax deductions encouraged to the athlete by other accountants because they are an aggressive and improper interpretation of tax laws.
- Yesterday, Erik Brady of USA TODAY Sports wrote an article primarily focused on the work of K. Sean Packard, tax director for OFS Wealth - a wealth management team associated with the sports agency Octagon. In this profile, Packard shared just how hectic tax compliance, and particularly - tax season, can be for the tax advisers of professional athletes. Packard is responsible for the tax compliance of over 200 athletes within nearly 30 state tax jurisdictions and 8 city tax jurisdictions. One of the major complexities Packard highlighted was comparing (but often - contrasting) the withholding tax documents of professional athletes to Packard's estimation of tax due.
- Lastly, Greg Ryan of the Boston Business Journal profiled in his article yesterday "the attorney trying to cut the 'jock tax' on Tom Brady and his pro-sports peers." Although Ryan's article coincides with Tax Day, his article highlights two tax cases represented by Stephen Kidder, partner at Hemenway & Barnes LLP, that involve the taxation of professional athletes. Kidder is representing the professional athlete taxpayers in a case before the Ohio Supreme Court which argues the constitutionality of Cleveland's income apportionment formula. He is also representing several professional athlete taxpayers in a refund claim against Tennessee for the "jock tax" they previously assessed but have since repealed due to fears their format could be ruled unconstitutional. Kidder's cases may not force him to meet any 4/15 deadlines but as the tax counsel for the player associations of the NFL, NBA, MLB, NHL and MLS, every day probably seems like Tax Day to Kidder.
While I encourage you to read all of these stories, I think the quote of a professional athlete interviewed in Erik Brady's story best summarizes Tax Day - and tax season - for professional athletes: "nobody knows what's going on."
Happy Tax Day everyone!
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