Skip to content

Lawmakers want to prevent Donald Sterling from deducting NBA’s $2.5 million fine from his taxes

May 8, 2014, 11:59 AM EDT

Donald Sterling Donald Sterling

The NBA calls its financial penalties “fines,” but they’re really forced charitable donations. They’re also, as Lamar Odom successfully argued to the IRS, business expenses.

You can bet Donald Sterling will try to write off his $2.5 million fine on his taxes.

On both the federal and state levels, lawmakers want to prevent that.

Kay Bell of Don’t Mess With Taxes:

Any deduction is just not right, say six House Democrats. So they’ve introduced the Stop Penalizing Taxpayers for Sports Owner Fouls Act of 2014.

The bill, which would apply to fines since Jan. 1, says:

In the case of an individual who owns (directly or indirectly) a professional sports franchise, no deduction shall be allowed under sub- section (a) for any fine or similar penalty paid to the professional sports league or association of which the franchise is a member.’’.

This would apply to Sterling – and was obviously proposed with him in mind.

As unsympathetic as Sterling is, I just don’t believe this law would be constitutional. If passed – which I suspect is unlikely to happen anyway – the courts could deem it ex post facto. In other words, the law punishes for acts committed before the law passed, usually a method not allowed in the United States.

Plus, I don’t like further complicating an already far-too-complicated tax code with a specific rule that singles out sports owners. Why should sports owners have their own tax code? What makes them different than the rest of us? (Yes, I’m against stadium subsidies, too. Don’t fix that problem by creating another.)

California lawmakers are proposing something similar. Phil Willon of the Los Angeles Times:

Two state Assembly members from Los Angeles filed legislation Tuesday that would prevent sports team owners from writing off league fines as a business expense when they file their state income tax returns.

The bill was filed by Democratic Assemblymen Raul Bocanegra of Pacoima and Reggie Jones-Sawyer of Los Angeles.

“Donald Sterling’s outrageous comments and historic fine should not be rewarded with a multimillion-dollar tax refund,” said Bocanegra, who chairs the Revenue and Taxation Committee. “This fine is intended as a punishment; it should not be used as a tax loophole.

The specifics of this bill are not clear, but I have the same concerns stated above.

At least one politician, though, might be on the right track – actually using the Sterling situation to do good. Willon:

Meanwhile, Rep. Brad Sherman (D-Sherman Oaks) has asked city, state and federal regulators to “prioritize” inquiries into any allegations that Sterling’s companies engaged in racial discrimination against people who sought to rent apartments at the billionaire’s residential properties.

In a letter to the regulators, Sherman cited a payment of more than $2.7 million that Sterling made in 2009 to settle federal claims that he discriminated against tenants. Sherman’s letter did not say there were allegations pending against Sterling or his companies.

If there aren’t new allegations against Sterling, it would be difficult to do much now after he’s settled, but yeah, the government should definitely be further investigating Sterling’s alleged housing discrimination. While they’re at it, apply that level of scrutiny to everyone – not just the headline-inducing Sterling – suspected of housing discrimination. That actually matters.

Latest Posts
  1. Report: Thanasis Antetokounmpo chooses Knicks D-League team over playing in Europe next season

    Aug 21, 2014, 8:59 PM EDT

    thanasis nba draft

    Knicks finally considering the importance of developing young talent for the future.

  2. Report: Timberwolves to end up with Thad Young, Anthony Bennett as part of Kevin Love trade

    Aug 21, 2014, 7:31 PM EDT

    Kevin Love Kevin Love

    Wiggins too, while guys like Alexey Shved will be sent to the Sixers.

  3. Shaq answers the question: Kobe or LeBron?

    Aug 21, 2014, 6:12 PM EDT

    Shaquille O'Neal AP

    Gone are the days when Shaq would have used this as an opportunity to take a shot at Kobe.

  4. NBA GM says ‘there’s no reason’ to trade for restricted free agents Greg Monroe or Eric Bledsoe

    Aug 21, 2014, 5:02 PM EDT

    John Loyer, Greg Monroe John Loyer, Greg Monroe

    Why give up assets now, when either player could be signed outright as an unrestricted free agent next summer?

  5. DeMarcus Cousins wants to be the third ‘Splash Brother’ (VIDEO)

    Aug 21, 2014, 3:59 PM EDT

    Los Angeles Clippers v Sacramento Kings Getty Images

    Stephen Curry: “We’re still taking applications.”

  6. Jeremy Lin smashes a cake in his mother’s face (Instagram)

    Aug 21, 2014, 12:10 PM EDT

    Jeremy Lin Jeremy Lin

    Being Jeremy Lin’s parent must be an interesting experience. What do you say to him to correct him.

  7. Kyrie Irving with crossover, step-back jumper for Team USA (VIDEO)

    Aug 21, 2014, 11:30 AM EDT

    Team USA Showcase Getty Images

    It’s a great move, one Irving pulls off almost ever game.

  8. Derrick Rose says he’ll play Friday vs. Puerto Rico

    Aug 21, 2014, 10:45 AM EDT

    Derrick Rose, Tom Thibodeau Derrick Rose, Tom Thibodeau

    Patience is the right play here. And patience is never popular with any fan base.

  9. Kentucky’s Calipari calls David Blatt right guy to coach Cavaliers

    Aug 21, 2014, 9:45 AM EDT

    David Blatt David Blatt

    Blatt can coach, but if it takes a season for the Cavaliers to find their identity (as it did with LeBron in Miami) will he get the chance to stick around for it?

  10. Report: Don’t be so sure on Anthony Bennett to Philadelphia rumors

    Aug 21, 2014, 9:16 AM EDT

    Anthony Bennett Anthony Bennett

    If you’re now rebuilding in Minnesota, why trade Bennett?

  11. DeMar DeRozan leads Team USA in scoring, could well stick with team (VIDEO)

    Aug 21, 2014, 1:33 AM EDT

    Dominican Republic v United States Getty Images

    He also was a scoring machine at the showcase in Las Vegas.

  12. Coach K: No Team USA cuts before Friday’s game

    Aug 20, 2014, 11:15 PM EDT

    Team USA Practice Session Getty Images

    16 players will practice and be available for Friday’s game against Puerto Rico, but the roster needs to be trimmed to 12 in advance of the FIBA World Cup.

  13. Wednesday And-1 links: Youths who entered Ray Allen’s home charged with trespassing

    Aug 20, 2014, 9:45 PM EDT

    2014 NBA Finals - Practice Day And Media Availability Getty Images

    Including a link to the trailers of the STARZ show LeBron James is producing loosely based on his life

Featured video

Will LeBron get booed Christmas Day in Miami?
Top 10 NBA Player Searches
  1. D. Rose (3443)
  2. L. James (2124)
  3. S. Marion (2106)
  4. K. Bryant (2036)
  5. D. Cousins (2023)
  1. R. Allen (1914)
  2. A. Davis (1877)
  3. C. Anthony (1787)
  4. P. George (1785)
  5. K. Irving (1703)