May 8, 2014, 11:59 AM EDT
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.
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.
Apr 27, 2015, 1:12 PM EDT
Wallace owed more than $10 million next season
Apr 27, 2015, 12:26 PM EDT
What does Walker’s cratered draft stock say about Billy Donovan?
Apr 27, 2015, 11:45 AM EDT
If that was their plan, they executed it well
Apr 27, 2015, 11:03 AM EDT
Isaiah Thomas played, um, creative defense
Apr 27, 2015, 10:24 AM EDT
Celtics were reportedly gaining ground before Kelly Olynyk
Apr 27, 2015, 9:46 AM EDT
Wizards forward started talking before series, hasn’t stopped
Apr 27, 2015, 9:07 AM EDT
Celtics forward: ‘I would never intentionally hurt Kevin or anyone else’
Apr 27, 2015, 8:30 AM EDT
Somebody looks a lot more comfortable with no Rajon Rondo around.
Apr 27, 2015, 8:00 AM EDT
Well played Rick Carlisle. Well played.
Apr 27, 2015, 2:34 AM EDT
Love being out could be an issue in the next round as the Cavs take on the Bulls.
Apr 27, 2015, 1:38 AM EDT
The question is can Dallas replicate all they did right on the road?
Apr 26, 2015, 11:02 PM EDT
The Boston Celtics fans got a show.
Apr 26, 2015, 9:33 PM EDT
Another stellar performance from John Wall buries Toronto’s season.
Apr 26, 2015, 9:17 PM EDT
The Clippers needed their big stars to step up Sunday or they were going to be in a very deep hole. They got it.
Apr 26, 2015, 6:31 PM EDT
Blake Griffin grabbed 19 rebounds, and Austin Rivers (!) chipped in 16 points in 17 minutes off the bench.
Apr 26, 2015, 6:30 PM EDT
With the new salary cap, Davis’ deal could approach $140 million.
Apr 26, 2015, 5:18 PM EDT
Kevin Love gets hurt, Cleveland gets revenge, and Boston gets swept
Apr 26, 2015, 4:58 PM EDT
Conley suffered the injury in Memphis’ Game 3 win in Portland.
Apr 26, 2015, 4:30 PM EDT
It sounds like he’s taking a victory lap.
Apr 26, 2015, 2:55 PM EDT
Smith could face suspension.
- Report: If Kevin Love leaves Cavaliers, Lakers are team to beat in free agency 22
- Rumor: Kevin Love out minimum of two weeks, will likely miss most or all of series vs. Bulls 38
- Monta Ellis, J.J. Barea pairing ignites Mavericks offense, gets Dallas Game 4 win over Houston 8
- Wizards blow out Raptors to complete first-round sweep 17
- Chris Paul scores 34 points, Clippers win Game 4 to even series with Spurs 6
- Cavaliers advance to second round – but but maybe lose Kevin Love and moral high ground in process 60
- Mike Conley out for Game 4 with “serious” facial injury, no timetable for return 6
- Grizzlies start fast, hang on to beat Portland, take 3-0 series lead 2