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Jackson, Nicks scam Uncle Sam, legally

UncleSam_2

The fiscal cliff finally is intersecting with the NFL.

Lost in the suggestion that the notoriously cap-rich Buccaneers chewed up a few million in current-year cap space (which could have been carried to 2013 anyway) by shifting millions in base salary due and payable to receiver Vincent Jackson and guard Carl Nicks is the reality that Jackson and Nick likely have saved hundreds of thousands in tax dollars by taking the bulk of their 2013 pay in 2012.

Per a source with knowledge of Jackson’s contract, $12.16 million of his 2013 base salary of $13 million has been pushed into 2012, in the form of a guaranteed roster bonus that will be prorated at the rate of $2.432 million per year from 2012 through 2016.  Though the move creates plenty of 2013 spending room for a team that has cap problems only when the wind is whipping through St. Petersburg, the adjustment allowed Jackson to pocket $559,936 that otherwise would have gone to the federal government.

That’s the difference between the federal taxes Jackson will pay on the money at a 35-percent rate in 2012 and a looming 39.6-percent burden in 2013.

For Nicks, $11.785 million was shifted to 2012, creating a federal tax savings of $542,110.

The Bucs potentially benefit from this adjustment of payments via potential changes to the payroll tax rate in 2013.  But it also creates plenty of goodwill for the players.

Of course, it may not make Uncle Sam very happy.  Via those two new contracts, he’s been frozen out of more than $1 million in tax money that he otherwise would have received.

Meanwhile, why aren’t more players doing the same thing?  It’s arguably professional malpractice for agents to not at least attempt to take future pay now in order to reduce the future tax burden for their clients, and we wonder whether and to what extent the NFLPA has encouraged restructurings aimed at legitimate tax avoidance.

Uncle Sam says, “Hopefully not at all.”

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26 Responses to “Jackson, Nicks scam Uncle Sam, legally”
  1. jeremywflores says: Dec 28, 2012 2:29 PM

    Impressive.

  2. timbuttrum says: Dec 28, 2012 2:32 PM

    Underspending and violating the “spirit of the cap” for all of those years is really paying dividends for the Bucs now.

  3. Mr. Wright 212 says: Dec 28, 2012 2:33 PM

    See, Skins and Cowboys fans, that’s how you do it. Instead of actually illegally backloading deals and blaming Mara because you got caught, when the rest of the owners made the decision to sanction, not Mara ha.

  4. byzr says: Dec 28, 2012 2:34 PM

    having a good accountant/agent isn’t really much of a scam is it?

  5. gbrim21 says: Dec 28, 2012 2:38 PM

    Newsflash: it’s not a scam when it’s legal. It’s what we call tax planning.

  6. mecheng04 says: Dec 28, 2012 2:43 PM

    Poor Uncle Sam is only going to get $8.67 million from those two guys rather than the $9.81 million that they’re entitled to.

    There’s those rich people not paying their “fair share” again…

  7. BigBeachBall says: Dec 28, 2012 2:49 PM

    We all should have mitt romneys accountant.

  8. thegreatgabbert says: Dec 28, 2012 2:56 PM

    I think the government will get most of that back in increased corporate taxes on the team next season, would they not? From the team point of view it would reduce their profit margin in 2012, with it’s lower tax burden, and presumably increase the profit margin by a corresponding amount in 2o13.

  9. nflfan1 says: Dec 28, 2012 3:01 PM

    Only wish they had provided a name. I can always use a good accountant.

  10. johnnyjagfan says: Dec 28, 2012 3:12 PM

    Ha! All these guys making Romney-like moves to save on taxes.

  11. CKL says: Dec 28, 2012 3:16 PM

    I am not sure how much financial expertise agents have vis a vis tax planning. I would hope most players (and really anyone) have good financial planners/accountants they use. That’s more their bailiwick.

  12. tbpdog says: Dec 28, 2012 3:28 PM

    Mr Wright…why don’t you explain to everyone how what Dallas and the Redskins did was “illegal” when it was not against any NFL rule……we will be waiting.

    The other owners just wanted to punish Dallas and Washington for not colluding (which is actually illegal) to keep salaries low.

    And yeah, the Bucs suck even worse than Dallas and Washington, who at least have a shot to make the playoffs..so keep pounding your chest over you cap space.

  13. mecheng04 says: Dec 28, 2012 3:28 PM

    thegreatgabbert says:
    Dec 28, 2012 2:56 PM
    I think the government will get most of that back in increased corporate taxes on the team next season, would they not? From the team point of view it would reduce their profit margin in 2012, with it’s lower tax burden, and presumably increase the profit margin by a corresponding amount in 2o13.
    ———————————————–
    @thegreatgabbert

    I don’t think so. The team is still spending the same amount of money and the corporate tax rate is 35%. At this time, it’s not changing with the 39.6% personal income tax rate. All things being equal, whatever they won’t pay this year, they’ll pay next year.

  14. skinsrollyou says: Dec 28, 2012 3:38 PM

    The redskins and cowboys did nothing illegal or against the rules moron.

  15. Mr. Wright 212 says: Dec 28, 2012 3:43 PM

    tbpdog says: Dec 28, 2012 3:28 PM

    Mr Wright…why don’t you explain to everyone how what Dallas and the Redskins did was “illegal” when it was not against any NFL rule……we will be waiting.

    The other owners just wanted to punish Dallas and Washington for not colluding (which is actually illegal) to keep salaries low.

    And yeah, the Bucs suck even worse than Dallas and Washington, who at least have a shot to make the playoffs..so keep pounding your chest over you cap space.
    ————————–

    They backloaded the contracts signed in the uncapped year, with the intent of stashing money to give the appearance that their cap situation was lower than it actually was, when it was done with the sincere intent to skirt the rules. This was explained months ago, but then again, people like you would rather parrot what you hear everyone else say, than to conduct actual research. The American Education System continues to show massive examples of failure with every post on this site.

  16. shackdelrio says: Dec 28, 2012 3:53 PM

    So are we to assume that NBC’s parent company doesn’t do everything legally possible to pay as little as possible in taxes?

  17. johnnyoclock says: Dec 28, 2012 3:55 PM

    Lord knows the government would have just wasted that extra million anyway. Good for them

  18. themagicfanguy says: Dec 28, 2012 4:03 PM

    Mr. Wright, you are correct. The Skins and ‘Boys DID backload contracts in the uncapped year. What you failed to mention is that it was perfectly LEGAL to do so. Was it a bit shady? Yes. Does that matter? No. Just because the other owners collectively decided NOT to do so, does not mean that the Skins and Cowboys were breaking any ACTUAL rules.
    Perhaps before you insult the education system, and other commenter’s intelligence, maybe YOU should do some research. You say that they are parroting others, yet I think you are just arguing due to some non-conformist point of view.

  19. grudenthediva says: Dec 28, 2012 4:06 PM

    “All these guys making Romney-like moves to save on taxes.”

    If they had, they’d be paying $100k or less.

    They only wish they were taking advantage of Rmoney’s loophole…er…”carried interest” tricks

  20. eatitfanboy says: Dec 28, 2012 4:29 PM

    A “legal” scam?

    Are you sure you used to be a lawyer?

  21. jamaltimore says: Dec 28, 2012 4:31 PM

    No one is offended that a guy being paid the same amount in 2013 will be paying 600K more in taxes to the federal government?

    I’m no milllionaire but that’s real dollars people and for a rookie running back who may get one big pay day next year and then never again that’s a heck of a lot of money to lose for your once in a lifetime contract.

  22. duncanthecat says: Dec 28, 2012 4:32 PM

    Tax avoidance with any means is envogue.

    Congrats and hopefully all players arer lowering their taxes via any means possible.

    Let the free loaders loath in their wallow.

  23. briang123 says: Dec 28, 2012 5:24 PM

    How dare they not pay their fair share? Millions of Obama voters are depending on those taxes.

  24. klutch14u says: Dec 28, 2012 7:10 PM

    How dare they use completely legal “tricks” to avoid giving the govt more money to waste.

    All the baby’s out there need to realize, if they didn’t make it so damned complicated people wouldn’t have “loopholes” to find.

  25. gt40bear says: Dec 28, 2012 8:57 PM

    Ironically, they both probably voted for obama and his soak the rich policies. Good job guys, stick it to ‘your’ man. Love it.

  26. bluebongzilla says: Dec 29, 2012 2:19 AM

    “They backloaded the contracts signed in the uncapped year, with the intent of stashing money to give the appearance that their cap situation was lower than it actually was, when it was done with the sincere intent to skirt the rules.”

    What part of “there were no salary cap rules” do you people not understand?

    I bet Jackson and Nicks voted for Obama.

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