Tag: Taxes

Everyone Is Going to Have to Accept the Fact That the Guy Who Caught Derek Jeter’s 3,000th Hit Is Going to Pay Some Taxes

As you may have heard, Derek Jeter hit a home run for his 3,000th hit on Saturday and it has resulted in fanfare that usually follows noteworthy accomplishments by media darling sports superheroes-cum-ladykillers.

What also has become news is tught the baseball. Sure Christian Lopez has over a hundred grand in school debt but since he’s a stand-up guy, he gave the ball to DJ because “it rightfully belonged to Jeter.” Also, if Lopez had kept it, everyone in the Bronx would have hunted him down like Osama bin Laden.

Anyhoo, after catching the ball, Lopez was whisked away by security to meet with Yankee President Randy Levine, who said, “What do you want?” Answer:

[T]he Yankees gave Mr. Lopez four Champions Suite tickets for their remaining home games and any postseason games, along with three bats, three balls and two jerseys, all signed by Jeter. For Sunday’s game the team gave him four front-row Legends seats, which sell for up to $1,358.90 each.

The Times rang up Paul Caron who reminded everyone that when Oprah gave her audience cars back in ’04, they all incurred taxes and Lopez would be no different. The Times then breaks down the value of the loot:

On SportsMemorabilia.com, an auction site, baseballs signed by Jeter were being sold for up to $600, jerseys for close to $1,000 and bats for $900.

The tickets to the 32 remaining home games (after Sunday) have a combined face value of $44,800 to $73,600, according to the team’s Web site. The tickets could be worth a lot more if the Yankees play deep into October. Steven Bandini, a tax partner at the accounting firm Zapken & Loeb, said that if the items were valued modestly at $50,000, they would probably carry a tax burden of about $14,000.

Elie Mystal, editor of our old sister site Above the Law wrote me, “[Taxing the memorabilia/tickets] [is] the kind of thing that makes people hate the Government.” Elie’s statement struck me as odd for a couple of reasons: 1) He is unabashed Mets fan and I would expect him to wish nothing but bad luck on Jeter, Lopez and the entire Yankee organization after this overt jerking off by media; 2) He is also an unabashed liberal which means that he should love the government and by virtue, love taxes. Not because taxes are lovable like puppies or grandmothers but because they build roads, fund public schools and go to pay salaries for government employees (that includes lawyers, accountants, engineers and whole bunch of people that aren’t IRS agents).

The items have value. Sorta like cash. Cash that is deposited into your bank account when your employer pays you for performing average work at your job. That cash gets there only after your employer has withheld taxes from your paycheck. Lopez was handed these tickets and memorabilia on a pinstriped platter. FREE. OF. TAX. By all accounts, he doesn’t have the income to purchase those items. If he did, he would have already paid taxes on that income. Simple.

Of course some (who are obviously unapologetically biased) might argue that these items were gifts and not taxable:

“The legal question of whether it is a gift or prize is whether the transferor is giving the property out of detached and disinterested generosity,” [Columbia Law] Professor Graetz said. “It’s hard for me, not being a Yankee fan, to think of the Yankees as being in the business of exercising generosity to others, but there’s a reasonable case to be made that these were given out of generosity.”

Right. Gifts. Gifts are what people give you when you get married. Gifts are what you give your friends when they move to the suburbs because you’ll never see them again. Gifts are what you give your friends’ (who moved to the fucking suburbs) kids because if you show up empty handed, you look like a complete dick.

These items are not gifts. The Yankees wanted the ball, Levine asked Lopez what he wanted and he told them what items would do the trick. TA-DA, we’ve got a deal. Besides, I’m guessing if Christian Lopez is the kind of guy to hand over the ball that was Jeter’s 3,000th hit, he isn’t too caught up thinking about the tax consequences of falling bassackwards into some tickets and priceless (to a Yankees fan, anyway) memorabilia.

UPDATE: Standup guy status CONFIRMED:

“Worse comes to worse, I’ll have to pay the taxes,” he told the Daily News on Monday. “I’m not going to return the seats. I have a lot of family and friends who will help me out if need be. “The IRS has a job to do, so I’m not going to hold it against them, but it would be cool if they helped me out a little on this.”

Returning Jeter’s Big Hit: No Good Deed Goes Untaxed (Perhaps) [NYT]
Christian Lopez, fan who handed over Derek Jeter’s historic 3,000th-hit ball, will owe IRS thousands [NYDN via DB]

Eric Cantor Describes Debt Ceiling Debate Using the Most Unimaginative Expression Possible

“We don’t believe that we ought to be raising taxes right now on people in this recession and in this economy, and they do,” the majority leader added.

“That is just an irreconcilable difference, and if the president wants the debt ceiling, we’re not going to go along with that if they want to raise taxes, and it just is what it is.”“That is just an irreconcilable difference, and if the president wants the debt ceiling, we’re not going to go along with that if they want to raise taxes, and it just is what it is.” [The Hill]

Indiana Department of Revenue Will Waffle on Whether It Wants Your Overdue Taxes If It Damn Well Pleases

Taxes are difficult. Given. Even for the professionals that deal with them every day, it can be an exhausting mental exercise that will inevitably lead to mistakes. Example: Back in 2003, Indiana’s Department of Revenue (“DOR”) sent a $1.1 million refund to Aisin USA Manufacturing for its 2001 return. Aisin filed an amended return to show this refund only to have the DOR inform the company that a “clerical error” had been made and the company actually owed over $600k. Aisin wasn’t exactly thrilled with this and, citing the statute of limitations, told Indiana to drop dead. Surprisingly, this seemed to work:

The company then received a letter from DOR stating, “Your recent explanation and/or payment, with respect to the specific liability number referenced above, is satisfactory. No further action is required on your part for this liability.”

Then, not unlike the girlfriend who decides to change her outfit the moment you’re working out the door, the state took it back:

[I]n 2007 and 2008, the DOR notified Aisin that they actually did have to pay the disputed sum.

The state gave the company a break, cutting the amount due by about $70k but begrudgingly added, “Aisin’s continued wrongful retention of this amount d[id] not represent the action of a responsible corporate citizen.”

Long story, short – the DOR sued Aisin to get the taxes due in trial court because it hadn’t jumped through all the hoops necessary to submit the case in tax court. The Court of Appeals wasn’t impressed by this but ultimately the Indiana Supreme Court said everything was kosher and ruled in favor of the state and is now going back to Superior Court.

So, there are lots of lessons here. It appears that Indiana’s DOR can 1) make really bad mistakes; 2) decide those mistakes are NBD; 3) can change their minds and conclude that, mistakes or not, you owing them money is a BFD; 4) don’t feel the need to follow their own rules.

And they ultimately win the right to continue a battle over half a million bucks that has been going on for almost ten years. Seems about right.

Indiana Department of Revenue Rivals the Ministry of Silly Procedures in Tax Refund Case [Tax Foundation]
Zoeller v. Aisin USA Manufacturing, Inc. [Justia]

After Today’s Job Report, Eric Cantor Can’t Imagine Why Anyone Would Think Raising Taxes Is Good Idea

” ‘Disappointing’ is an understatement,” Cantor said on the floor in a colloquy with House Minority Whip Steny Hoyer (D-Md.). Cantor was citing the jobs report for June that said only 18,000 private-sector jobs were created in that month, and that the unemployment rate increased to 9.2 percent.

“Just look at the jobs report today,” Cantor added. “I cannot fathom how anybody, how anyone thinks right now is a good time to raise taxes. Who thinks that raising taxes on individuals and small businesses can help create jobs?” [The Hill]

Don’t Try Using Your Fancy Tax Code Words on Orrin Hatch

President Obama and his liberal allies are calling for a ‘balanced approach’ and a revenue piece to deficit reduction. We hear this from the press all the time: ‘New revenues need to be a part of any deal to reduce the deficit.’ These are simply code words for a tax hike.

It is clear that the professional left is insisting that President Obama include tax increases in any negotiated agreement to raise the debt ceiling. [ATR]

Area Man Finally Aware That a Meal Tax in 2011 Would Almost Cost Him a Hershey Bar in His Childhood

Easton, Massachusetts resident Michael Freese recently discovered that the town’s meal tax cost him an extra 4¢ on his $5.75 hamburger, reports the Enterprise News. Freese was under the impression that only “New York and Seattle and California had that.”

While Freese is probably aware that this extra 4¢ would get him 80% closer to a Hershey Bar when he was growing up, he can also take comfort that in this day and age it will get IRS Agents off your back. [Enterprise News]

Bill Clinton Wants a Lower Corporate Tax Rate

“We’ve got an uncompetitive rate,” Clinton told a crowd at the Aspen Ideas Festival on Saturday.

“We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay.” [HP]

Obama Gives Corporate Jet Owners, Hedge Fund Managers the Business About Their Taxes

From the press conference that is still going, “I don’t think it’s real radical” to ask corporate jet owners and millionaires to pay higher taxes, Obama said. “No-one wants to see the U.S default.”

And then:

You can’t reduce debt levels without… increasing revenue in some way,” Obama said. “That revenue is coming out of folks who are doing extraordinarily well, and enjoying the lowest tax rates since before I was born. If you are a wealthy CEO or hedge fund manager in America right now, your taxes are lower than they have ever been.”

[via BI, NYT]

Mitch McConnell Suggests That Anyone in Favor of Tax Hikes Is Committing Political Suicide

Hours before a meeting with President Obama at the White House, Senate Majority Leader Mitch McConnell (R-Ky.) said that any debt-ceiling deals that included tax hikes would be “politically impossible” in the current Congress because most Republicans and many Democrats oppose them.

“Those who are calling for tax hikes as a part of these debt discussions either have amnesia about the fate of similar votes just six months ago — when Democrats controlled both chambers of Congress as well as the White House — or they’re acting in bad faith, since we all know that including massive, job-killing tax hikes would be a poison pill,” said McConnell on Monday from the Senate floor. [The Hill]

Taxes Are the Reason Eric Cantor Walked Out on Joe Biden

The deficit talks led by Vice President Biden faced a dispute over whether to include the Pentagon in any spending caps or deficit triggers, but the office of House Majority Leader Eric Cantor (R-Va.) said Friday that taxes were the only reason the talks collapsed Thursday.

“There were some disagreements on defense, but the issue is being greatly overblown to distract from Democrats’ push to raise taxes,” spokesman Brad Dayspring said. “The tax issue was the sole reason the talks reached an impasse, but it’s important to recognize that the group made great progress in identifying trillions of dollars in spending cuts that can serve as a blueprint for a potential compromise,” he said. [The Hill]

Mitt Romney Unable to Resist the Siren’s Call That Is the Taxpayer Protection Pledge

In a political move akin to etching your name in to the conservative, low government Book of Life, GOP Presidential nominee Mitt Romney has signed the Grover Norquist’s sacred Taxpayer Protection Pledge.

It’s not a terribly surprising move, as this play will cater to the tax-hating Tea Party crowd as well as the tax-hating-rich-people-not-so-unlike-Mitt Romney crowd.

“By signing the Pledge, Governor Romney keeps the faith of the American taxpayer by taking tax hikes off the table as President,” said Grover Norquist, president of Americans for Tax Reform. “Politicians in Washington should be focused on reducing government spending.”

Of course what this move also does is protect Romney from any sternly worded letters or other communication from Americans for Tax Reform that would place him the squarely in the camp of that taxpayer Judas, Tom Coburn. Regardless of some people having the audacity to deem the Pledge meaningless.

[via ATR]

Deloitte Tax Expert Makes Statement That He’s Likely to Regret

“If there are Republicans who break with Grover Norquist’s position, I think that’s an important thing,” said Clint Stretch, managing principal of tax policy at Deloitte Tax LLP in Washington.

“I think it signals a willingness on their part to have the fight with him over whether every tax expenditure is a legitimate reduction in effective tax rate, or whether there are some that should be regarded the way they regard spending programs.” [Bloomberg, Earlier, Earlier]