Bill Romanowski’s investment in a failed horse-breeding business has left him with a large back-tax bill.
The United States Tax Court ruled in February that the longtime NFL linebacker and his wife, Julie, owe about $4.75 million in unpaid taxes for the years 1998 through 2004 stemming from their investment in ClassicStar, which involved the leasing of mares for breeding purposes. (The Paulick Report has a good summary of Romanowski’s involvement with ClassicStar.)
According to the tax court ruling, the Romanowskis invested close to $13.1 million in the horse-breeding business, and they listed expenses and took deductions related to the venture. The court, in a written opinion, held that "(the Romanowskis’) horse-breeding activities were not engaged in for profit, and the related expenses are therefore not deductible.”
The court also wrote that Rodney Atherton, an attorney who advised the Romanowskis on dealing with ClassicStar, “received improper payments from ClassicStar as a result of (the Romanowskis) choosing to enter the program.”
According to the Denver Post, Romanowski and Atherton’s former law firm reached a settlement in 2011.
Plaintiffs were awarded a $65.0 million judgment against now-bankrupt ClassicStar in 2011 after a federal judge ruled the company engaged in misconduct.