Being caught for tax evasion seems like a fairly high-class problem to have. Like finding a place to dock your yacht or having gout. Al Capone, of course, is the patron saint of tax fraud. And syphilis. And Geraldo Rivera televised spectaculars. But mostly of tax fraud. And then there’s Wesley Snipes, who is the modern-day tax evader par excellence. In researching this post, I just found out that Snipes was released from prison just this past April. Welcome back Wesley!
So yeah, evading taxes tends to be, like, the sport of Kings. Capone and Snipes. Snipes and Capone. Any way you cut it, you’re in a pretty select group when you don’t pay your taxes. I, myself, have never had the chance to evade taxes as the IRS has never come after me all that hard. One of the perks of being destitute, I suppose. My cramped studio apartment is hot in the summer and cold in the winter and during all four seasons smells like old cheese. The McDonald’s sign outside the window keeps my girlfriend awake at night. But seriously, I could brag like this for at least two thousand words.
What I’m trying to say, I guess, is that the very idea of evading one’s taxes is as foreign to me as the game of soccer, a game in which I share the estimable opinion of the Prince of Soul Glo, Darryl Jenks: that’s a real cute sport.
Which is why it is fantastic that I can explore these two alien worlds concurrently. Let’s talk Lionel Messi. Let’s habla fútbol.
Let’s talk tax evasion. Let’s talk sports…
Elie linked to an article describing Lionel Messi’s tax dodge yesterday. Like all tax matters, it’s fairly arcane stuff. Put simply, Messi did what every rich person and company in the world does and moved a great deal of his finances offshore. Specifically, his “intellectual property”:
But Lionel Messi, the Argentine soccer sensation who plays for FC Barcelona, has IP worth at least $21 million a year. That’s the value of his endorsement deals, led by his relationship with Adidas. And according to the Spanish government, he has dodged nearly €4.2 million ($5.5 million) in taxes by using that IP in a very Apple-like way.
Spain accuses Messi and his father, who manages the player’s finances, of selling the rights (link in Spanish) to his brand image to shell companies in tax havens like Uruguay and Belize, and then licensing those rights to the companies and products he endorses. Such a move would shift Messi’s income from Spain, where he lives and pays taxes, to those lower-tax states.
It strikes me as odd that a man whose income is largely in the public domain chooses to construct an elaborate shell game to hide said income from Spanish tax authorities who surely know how much money Señor Messi should be shoveling their way. But I suppose the pervasiveness of tax avoidance makes even the most creative schemes seem safe; the work of earnest, law-abiding nerds, accountants, and/or lawyers.
The Associated Press account of this international income imbroglio notes just how deep the potential doodoo is for Messi:
Sports finance analyst at the University of Navarra, Professor Sandalio Gomez, said that if found guilty of evading tax on his image rights, Messi could be liable to a fine amounting to 150 per cent of the earnings concealed. A guilty verdict would not carry a jail sentence, Gomez said.
Former Portugal star Luis Figo was last year forced to pay 2.45 million euros in income tax from his time at Barcelona. The tax authorities said the money was due from the 1997-1999 period and pertained to his image rights.
Gregor Reiter, a German attorney specializing in sports law, said Messi’s difficulties show “how important it is for athletes to have excellent and highly-trained counsellors and agents” to handle their financial affairs, as player payments often travel across international borders and complicate tax assessments.
And the German should know the value of a good tax attorney. Germany had previously been das kapital of athletes who shirked their tax responsibilities. Boris Becker and Steffi Graf were the two most famous tax refugees, absconding to places like Monaco to avoid allegedly crippling German levies.
At any rate, Lionel Messi may not have any precedent on the soccer field (or pitch, large rectangle of grass, whatever), but he is not the first famous person to avoid paying taxes.
RAPE AND BASIC CABLE
On May 28, a U.S. appeals court ruled that Comcast was well within its rights to relegate something called the Tennis Channel to its sports tier rather than carry it on its basic package. While I can’t tell you anything about the decision from a legal perspective because I skipped most of my Cable Law classes, I can guarantee that Chevron was cited.
However, the real news came about this week as an email from the CEO of the Tennis Channel to his staff was leaked to Deadspin. In the email, the CEO serves up a collection of words and sentiments so embarrassing, you’d think it were written by the gauche savages over at the MLB network. The particularly awful passage is this:
And finally, of all things to say there is not sufficient evidence of discrimination? Even Ray Charles could see the shameful way they treat those they do not own. Conjuring this impossible justification…that there isn’t sufficient evidence to support this and every other painful and brutal discrimination complaint is like looking at a building engulfed in flames and asking “what fire” ??? It’s like being raped for a decade by a brutal captor, finally winning in a long and painful public court trial (while you can’t get work because of your Scarlett Letter), and then on appeal years later from a pre-decided Mad Hatter of a court asking you, the victim, to produce a video to prove that it ever happened. Forget the scars, bruises and painful clarity with which everyone knows that your story is simply 100% true, where is your proof dear Alice???
Reading this email is like being raped through the looking glass. Read the whole thing here.
RAP SHEET ROLL CALL
* Eagles offensive lineman Jason Peters was arrested for drag racing in Monroe, Louisiana. Reports indicate that Peters’s opponent was lucky to have his woodscrews because, otherwise, his doors would have been blown completely off.
* Adam “Q-bert” Jones was charged with assault after allegedly punching a woman. Blows rained down on the woman as if they had been made to rain. As if they had been made to.
* Here is a college football player acting like Hacksaw Jim Duggan.
Soccer star Lionel Messi used the same trick as Apple to cut his tax bill [QZ]
Spanish prosecutor lodges 4-million euro tax fraud case against Lionel Messi [Edmonton Journal]
Tennis Channel CEO: Comcast Battle Like “Being Raped By Brutal Captor” [Deadspin]