IRS could be interested in undeclared bounty payments

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Law enforcement generally could be interested in the Saints’ multi-year conspiracy to coax NFL players into trying to injure opponents in exchange for cash payments.  Apart from whether the arrangement to try to inflict pain and injury on other players violated any state or federal laws, the placement of the payments in the players’ pockets could trigger a separate source of liability.

Regardless of whether the money came from legal or illegal activities, the money received by players represents income.  And if income isn’t disclosed to the IRS, that’s a problem.

Go ahead and scoff.  That’s surely what the NBA officials who traded first-class airfare for coach and kept the difference and didn’t pay taxes on it believed.  Before they were prosecuted for tax evasion.

The NFL already has the evidence.  The IRS needs merely to show up with a warrant for the file.

And if so inclined, the IRS can launch an investigation regarding the other 31 teams.  While Saints players and other employees opted initially to lie to the NFL, lying to federal authorities has entails slightly greater consequences.

Go ahead and scoff.  That’s surely what Martha Stewart did.

Of course, it won’t be a problem if the players declared the income and paid the taxes.

58 responses to “IRS could be interested in undeclared bounty payments

  1. If the IRS wants more money, why don’t they pass some laws to get companies like GE to actually pay a few bucks in taxes?

    It blows my freakin’ mind that I paid more income tax than General Electric did, and I’m not making a whole lot more than minimum wage.

    There’s something really rotten about the tax structure in this country, and I bet most of hard-working PFT regulars pay a much higher percentage of our income every day than the billionaire owners of the NFL teams.

    Gessh, this country is so screwed up regarding taxes.

  2. Called it yesterday on the Dungy post.
    This is why the punishment is going to be more severe than anyone imagines. It’s election year, someone in congress is going to want the FaceTime of a congressional investigation, and threaten the NFL with its exemptions. The fact that it in includes GMs and coaches, not just players (bosses if you will) only makes it worse. The Saints are not favorites with the League. Williams should be done and / or given an NCAA ‘Show Cause’ style punishment.

  3. Things are just getting worse for the Saints. I feel sorry for their fans to have to put up with this.

  4. I think the league may have more to say in another aspect. This is a salary cap violation. This money received by players has to be added on to their salary cap and if they are over they need to be penalized up to and including the loss of draft picks.

  5. The IRS the Governments Organized Crime Unit. Better pay up the United States needs every Penny.

    Martha Stewart was convicted of conspiracy and obstruction of justice in a notorious insider stock trading case in 2004 not for gambling with her friends and not claiming the $1500.00 bounty:)lol.

  6. Not sure this really has legs. Where did the money come from? A lot of it in player fines. If these “files” don’t track who paid the fines, there’s nothing stopping a player who received a $1,500 bounty from saying he paid the equivalent amount in fines and just chose not to report it because it was break even.

  7. How in the world could the IRS prove which players got how much money?

    Something tells me these payments were kept track of on an Excel spread sheet.

  8. This is where this case gets interesting.

    Private debt among friends less than $10k that aren’t reported as service for work on a W2 form doesn’t qualify as taxable income.

    The IRS would have to treat as gambling income. If an accountant proves that a player paid more $ into the fund than he received, the player could deduct the difference from his taxable income and get a reinbursement.

    That’s the loophole.

    No telling how Goodell would handle players techically gambling on games they played in. Even if they were betting on themselves.

  9. What next are we going to get taxed on game bets at work? NCAA brackets?
    ————————————
    Gambling winnings are included as income, though you can deduct any gambling losses.

  10. @packerman1968

    What next are we going to get taxed on game bets at work? NCAA brackets
    __________________________

    Yes genius. You are supposed to pay taxes on gambling winnings. Always have, always will.

  11. What next are we going to get taxed on game bets at work? NCAA brackets?

    ———————————————–
    Gambling winnings are included as income, though you can deduct any gambling losses to the extent of your winnings.

  12. not only do the players have to report the income, they can’t take any deductions against it because it’s “illegal income”
    ———————————————-
    you can take deductions for expenses incurred in an illegal activity or business so long as it has nothing to do with drugs

  13. orcheon says:
    Mar 3, 2012 5:20 PM
    not only do the players have to report the income, they can’t take any deductions against it because it’s “illegal income”
    ———————————————-
    you can take deductions for expenses incurred in an illegal activity or business so long as it has nothing to do with drugs
    ——————————-
    Wait, so I can’t write off this awesome Winnebago meth lab I just built? damn.

  14. To the poster who claims to have paid more than GE in taxes, start a company then you can complain.

    As for IRS coming after the players who earned extra money for bounties, isn’t this a bit like paying taxes on money earned from a garage sale? Good luck tracing all that money back and forth. Was is a pool of money that the players contributed to? The example of airplane tickets is different since those were expensed at cost to the company as the cost of the trip not intending the recipient to be enriched. This bounty is like an office pool just with bigger numbers.

  15. Gambling winnings are only counted as.income above $1199 when that figure or more is.won in one gambling event. Like a slot jackpot since you could win $500 at 4 different blackjack tables in one night and not have it reported as income. Of course you can deduct losses up to the gain.

  16. One thing on the NBA refs. One of them decided to take the IRS’ case against him to trial, and he prevailed. The entire dynamic changed after that.

  17. Sorry – corporations do not pay taxes – people do…

    chadmurdigan

    GE paying more taxes will come out of the pockets of consumers – eventually…

  18. Give me a break. The money has already been taxed when it was originally earned. Players may be in violation of illegal gambling, however.

  19. If I’m the prosecutor of a city that the Saints played in over the last 3 years and wanted to make a name for myself, I’m going to be looking at the injury report for those games. If any of the host city’s players were knocked out of the game, I would subpoena the NFL for the investigation records. If any money changed hands for that injury, that would be conspiracy to commit felonious assault. What occurred was outside the rules of the game, and given that a confession has already been released (what a dimwit, did he even consult with an attorney before issuing the statement?) The entire Saint’s organization could be prosecuted. Players and front office personnel will be tripping over each other trying to make a deal by throwing everyone else under the bus. If it can be shown that this was done elsewhere with the implicit OK by the owners, you could have Federal conspiracy charges apply under the RICO statute. If I’m in the NFL and even knew about any bounty for injuries, I’d be getting the best criminal defense attorney I can afford. Losing draft picks will be the least of the team’s problems.

  20. orcheon says:Mar 3, 2012 5:20 PM

    you can take deductions for expenses incurred in an illegal activity or business so long as it has nothing to do with drugs
    _________________________

    I agree. All you have to do is claim it as income and pay the tax. Most smart bookies claim their betting action (or at least a necessary portion of it) as income. That way, no Federal laws are broken.

  21. So the IRS is going to waste time and resources to go after guys who didnt declare 1,500 on their taxes. Vilma put up the 10K which wasnt paid, but most of the payouts were under $5ooo. Great.

  22. mueller10565

    No…RICO cases are for interstate conspiracy to commit crimes violations. Unless owners were funding the bounties for away games and they conspired with counterpart owners in different states on multiple occasions, there is no RICO case. Not even at all.

    But this is something that’s only going to get worse and worse for everybody.

    I make all sorts of crazy bets in my office. We have elevator races for $20 each. I don’t report that as income.

  23. Gambling winnings are only counted as.income above $1199 when that figure or more is.won in one gambling event. Like a slot jackpot since you could win $500 at 4 different blackjack tables in one night and not have it reported as income. Of course you can deduct losses up to the gain.

    ————————————————
    http://www.irs.gov/taxtopics/tc419.html

    you are required to include ALL gambling winnings, and you can deduct gambling losses if you itemize expenses

    under certain circumstances (which are probably what you are referring to), a payer is required to issue a form W-2G and withhold 25% of the winnings for federal income taxes

    http://www.irs.gov/pub/irs-pdf/iw2g.pdf

  24. I wonder when government decided they could tax nearly every monetary transaction between parties.

    It’s never enough.

  25. I wonder when government decided they could tax nearly every monetary transaction between parties.

    It’s never enough.

    ———————————————
    Feb 28th, 1913

  26. If I’m the prosecutor of a city that the Saints played in over the last 3 years and wanted to make a name for myself, I’m going to be looking at the injury report for those games. If any of the host city’s players were knocked out of the game, I would subpoena the NFL for the investigation records. If any money changed hands for that injury, that would be conspiracy to commit felonious assault.
    —————————————————

    Hey legal genius, it would not be assault, but would be considered battery. Assault is a verbal or physical threat to a person. Battery would be the actual physical contact. So with your legal genius thinking, then every tackle by every player in the NFL would be considered battery because it causes physical harm to the body, whether they are taken out of the game or not. Leading with the helmet, would be considered aggravated battery because the helmet could be considered a weapon of harm.

  27. Give me a break. The money has already been taxed when it was originally earned. Players may be in violation of illegal gambling, however.

    ——————————

    IRS doesn’t care.

    If you derive an economic benefit from something and it is not exempted in a specific provision, you are legally obligated to report it and pay taxes on it.

  28. They wouldn’t hesitate twice to audit a regular person, why should these guys be different. As far as Williams goes, he is a jackass. There is a reason he won’t be a head coach again . As d cordinator of Washington he had a million dollar bonus to be awarded if he didn’t become their coach.

  29. I don’t think this is too big a deal from the IRS standpoint. Despite all the IRS horror stories, they just want their money and usually work with people to get it.

    If they have some documented proof that a guy got a $10,000 payment and didn’t pay tax on it, they’ll say “hey, you owe ____ on that, pay up”, and unless the guy is either A) an idiot that made $900,000 a year and doesn’t have two or three-thousand dollars to pay it or B) the guy decides to say “screw you IRS, i’m not paying sheeoot”, the player will just pay the money and everyone goes home.

  30. Hey legal genius, it would not be assault, but would be considered battery. Assault is a verbal or physical threat to a person. Battery would be the actual physical contact. So with your legal genius thinking, then every tackle by every player in the NFL would be considered battery because it causes physical harm to the body, whether they are taken out of the game or not. Leading with the helmet, would be considered aggravated battery because the helmet could be considered a weapon of harm.
    ————————————————
    That’s why I love the First Amendment – It makes it easy to identify the idiots of the world.

    A tackle is within the rules of the game. Paying someone to intentionally harm another player is OUTSIDE the rules of the game, and subject to the laws of the jurisdiction where the incident took place. According to your convoluted logic, anything is permissible as long as it takes place on the field. If you recall, an NHL player was recently charged for a hit on an opposing player.

    I respectfully disagree with the poster on the RICO laws. I’ve seen them used in a very broad scope in the Federal courts. Although I would admit that it would take a ballsy U.S. Attorney to go that route.

  31. If the bounty system is outside of NFL law and was intended to harm another player beyond the rules of the game, then do the bounties not become hits and if that is the case, shouldn’t a differrent arm of federal law enforcement be involved? It seems to me the actions reach beyond the sidelines to such a degree they are illegal.

  32. Hey legal genius, it would not be assault, but would be considered battery. Assault is a verbal or physical threat to a person. Battery would be the actual physical contact. So with your legal genius thinking, then every tackle by every player in the NFL would be considered battery because it causes physical harm to the body, whether they are taken out of the game or not. Leading with the helmet, would be considered aggravated battery because the helmet could be considered a weapon of harm.

    ———————————————–

    Scenerio: I’m up for a big promotion at work in two weeks (let’s call it Super Promotion XLIV). However, to be considered, I need to have an interview this Sunday against another person. In order to increase my odds, I offer any of my coworkers $10,000 to injure my competition so he can’t make it to the interview. (where did I hear of something similar happening? Oh yeah, Saints LB Jonathan Vilma offered $10K to any teammate that would knock Brett Favre out of the 2009 NFC Championship Game)

    You would consider that legal?

  33. That’s why I love the First Amendment – It makes it easy to identify the idiots of the world.

    A tackle is within the rules of the game. Paying someone to intentionally harm another player is OUTSIDE the rules of the game, and subject to the laws of the jurisdiction where the incident took place. According to your convoluted logic, anything is permissible as long as it takes place on the field. If you recall, an NHL player was recently charged for a hit on an opposing player.
    ————-———————————————————————–First off you are missing a very vital point of this argument. In order to prove that any of these players were paid to “intentionally” harm another player you have to prove intent. You have to be able to prove that a player knowingly and intentionally went out and harmed anothe player. In the NHL incident it was easy to prove intent, because there were punches thrown and the players head was slammed into the ice by the other player. That is by all accounts an assault. Oh good luck proving anyone accepted any monies for said “intentional harm”. I’m pretty sure the team didn’t issue checks that stated, “bonus for intentionally harming Brett Favre”. Unless someone was secretly recording these transactions or someone confesses to being paid a certain amount of money for taking these actions it’s not going anywhere. Tracking cash payments is gonna be tough to do.

  34. Anyone not referring to this incident without ‘gate’ at the end of it, will also be fined.

  35. To the person who wrote if he was a prosecutor of a city that the Saints played in over the last 3 years.

    I am not so sure you would be making a good name for yourself as most people in that City would wonder why you and the City were wasting so much money on such fruitless cases…

    Look they did wrong But prosecution and from a Cities budget stand point what a waist of money that would be.

    I think if an individual players that did got knocked out of a game if they wanted to file a civil suit then that is up to them but good luck getting other players to file any charges….

  36. First off you are missing a very vital point of this argument. In order to prove that any of these players were paid to “intentionally” harm another player you have to prove intent. You have to be able to prove that a player knowingly and intentionally went out and harmed anothe player. In the NHL incident it was easy to prove intent, because there were punches thrown and the players head was slammed into the ice by the other player. That is by all accounts an assault. Oh good luck proving anyone accepted any monies for said “intentional harm”. I’m pretty sure the team didn’t issue checks that stated, “bonus for intentionally harming Brett Favre”. Unless someone was secretly recording these transactions or someone confesses to being paid a certain amount of money for taking these actions it’s not going anywhere. Tracking cash payments is gonna be tough to do.

    ————————-

    A group of players decide that if opposing player X gets knocked out of the game because of injury, the person delivering the blow gets $1500. DB John Doe knocks Player X out of the game and willingly collects the cash payment. That is obvious proof of intent.

    As for the cash payments – the NFL report and supporting documentation runs 50,000 pages. The league has obviously tracked the payments in order to make their case. If not, a couple of subpoenas to the players involved will create a stampede of players willing to sing to make a deal.

  37. To the person who wrote if he was a prosecutor of a city that the Saints played in over the last 3 years.

    I am not so sure you would be making a good name for yourself as most people in that City would wonder why you and the City were wasting so much money on such fruitless cases…

    Look they did wrong But prosecution and from a Cities budget stand point what a waist of money that would be.

    I think if an individual players that did got knocked out of a game if they wanted to file a civil suit then that is up to them but good luck getting other players to file any charges….

    ———

    Remember, this is not a traffic violation – this is a criminal conspiracy to inflict injury upon another person. With overall public opinion reacting negatively to the way the NFL has handled injuries in the past, I think most people (NFL fans would probably be split) would approve of this action as a way to clean up the game. The first prosecutor to initiate criminal proceedings will be the one that gets the most facetime. You can’t buy this type of PR.

    Also, it’s not the individual that files charges, it’s the State. You do not need the cooperation of the victim to pursue a criminal prosecution. If a person was injured during the game, it’s a matter of public record. They wouldn’t even need to be involved. Also, with the NFL report totaling 50,000 pages, all the heavy lifting has already been done. All a prosecutor needs to do is get a copy and run with it.

  38. This is comedy, the NHL has had fights for years and years. Are you telling me that the guys throwing the fists aren’t TRYING to inflict pain. It’s a game, a very physical game where people try to knock players out each and every game with or without a bounty. The more the law gets involved the worse the sports will be. Same with government. Stay away.

  39. IRS wants “all they can get”! True – they came after me with a false “return” to claim I owed them $1500 + on a -$3,000+ in 2002.

    IRS wants “all they can get”! False – they collected $0 from Obama when he received the Nobel Peace Prize of $146,000,000 in 2008. That “income” was a “capital gains income” that should have yielded 60% or over $80,000,000 in tax revenue for which Obama has paid zilch! Just think how much that will total with “penalty and interest”! AND Obama wants everyone to pay their fair share!?

  40. I know of a guy that played baseball in Japan many years ago and while he was there the club paid for his apartment which was about $8000 each month. He played there for 5 years so in essence his apartment cost about $480,000 over that span. After he came back to the states the IRS sent him a letter telling him that he didn’t report the apartment as income. He settled for over $100,000. Government, PLEASE get out of our lives.

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