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. Two years removed from being a top recruit, Florida’s Chris Walker declares for NBA draft

    Apr 27, 2015, 12:26 PM EDT

    Tennessee v Florida Getty Images

    What does Walker’s cratered draft stock say about Billy Donovan?

  2. Report: Cavaliers stated at halftime plan to avenge Kevin Love’s injury

    Apr 27, 2015, 11:45 AM EDT

    If that was their plan, they executed it well

  3. Report: If Kevin Love leaves Cavaliers, Lakers are team to beat in free agency

    Apr 27, 2015, 10:24 AM EDT

    Kevin Love, Tarik Black AP

    Celtics were reportedly gaining ground before Kelly Olynyk

  4. Paul Pierce trolls Drake, Raptors after sweep

    Apr 27, 2015, 9:46 AM EDT

    Wizards v Raptors Eastern Conference Quarterfinal Game 2 Getty Images

    Wizards forward started talking before series, hasn’t stopped

  5. Kelly Olynyk on Kevin Love’s accusation of intentionally injuring him: ‘That’s ridiculous’

    Apr 27, 2015, 9:07 AM EDT

    Celtics forward: ‘I would never intentionally hurt Kevin or anyone else’

  6. Watch Monta Ellis drop 31 on Rockets, lead Mavericks to win

    Apr 27, 2015, 8:30 AM EDT

    Monta Ellis Monta Ellis

    Somebody looks a lot more comfortable with no Rajon Rondo around.

  7. Rumor: Kevin Love out minimum of two weeks, will likely miss most or all of series vs. Bulls

    Apr 27, 2015, 2:34 AM EDT

    cd0ymzcznguwzdbhnduynddiytjhm2yyzthlmtjjotqwyyznpwzjymvhyzgwzgy5njixztvmzwrlzgzmymqxyza3ytg5 AP

    Love being out could be an issue in the next round as the Cavs take on the Bulls.

  8. Monta Ellis, J.J. Barea pairing ignites Mavericks offense, gets Dallas Game 4 win over Houston

    Apr 27, 2015, 1:38 AM EDT

    Monta Ellis, Trevor Ariza AP

    The question is can Dallas replicate all they did right on the road?

  9. Wizards blow out Raptors to complete first-round sweep

    Apr 26, 2015, 9:33 PM EDT

    Washington Wizards v Toronto Raptors Washington Wizards v Toronto Raptors

    Another stellar performance from John Wall buries Toronto’s season.

  10. Watch Chris Paul, Blake Griffin combine for big days to even Clippers with Spurs (VIDEO)

    Apr 26, 2015, 9:17 PM EDT

    Blake Griffin, ,Chris Paul Blake Griffin, ,Chris Paul

    The Clippers needed their big stars to step up Sunday or they were going to be in a very deep hole. They got it.

  11. Chris Paul scores 34 points, Clippers win Game 4 to even series with Spurs

    Apr 26, 2015, 6:31 PM EDT

    Tiago Splitter, Chris Paul AP

    Blake Griffin grabbed 19 rebounds, and Austin Rivers (!) chipped in 16 points in 17 minutes off the bench.

Featured video

Stephen Curry starting to define playoff legacy
Top 10 NBA Player Searches
  1. R. Rondo (4766)
  2. C. Parsons (4370)
  3. K. Durant (3788)
  4. N. Mirotic (3765)
  5. D. Lee (3726)
  1. K. Bryant (3569)
  2. T. Parker (3521)
  3. P. George (3441)
  4. P. Beverley (3232)
  5. K. Lowry (3199)