NBA's Lamar Odom cries foul, challenges IRS
by AccountingWEB on
Los Angeles Lakers forward Lamar Odom is accustomed to facing formidable opponents on the basketball court. But these days, he’s taking on the Internal Revenue Service in a different court setting over what he sees as a personal foul.
On his 2007 tax return, Odom wanted to claim deductions for $12,000 in sports fines and $178,000 he spent to get in shape. When the IRS said no and sent him a bill for $87,000 in August, Odom filed suit in U.S. Tax Court. The $87,000 total includes $9,000 in interest, but no accuracy-related penalties, which is unusual for such a case.
Odom, who is representing himself, filed and signed a plea at the Washington, D.C. Tax Court office on October 25, based on the August tax bill.
“The taxpayer claimed $12,000 of employee business expenses for fines that were assessed by the National Basketball Association," his plea stated. "These fines are commonly assessed on professional athletes and are work-related. Therefore, the fines incurred are ordinary and necessary employee business expense.”
Odom did not offer details about the actions that lead to the fines.
The IRS included an explanation to the bill sent to Odom: “We have disallowed some of the expenses you claimed as business expenses because it was determined they were personal expenses and not deductible.”
Financial sanctions that arise from criminal cases and violations, such as traffic fines, are not legally tax deductible. Odom’s defense to that deduction was this: “The fines imposed by the team and the NBA are not imposed for the violation of any government law and are therefore not specifically excluded.”
Odom also challenged the IRS for disallowing his fitness expenses. He defended the deduction by writing: “The taxpayer claimed $178,337 of employee business expenses for professional training and conditioning. The taxpayer’s employment contract requires that the taxpayer be in sufficient physical condition that allows him to perform as a professional basketball player throughout the basketball season.”
According Odom's filing, his 2007 adjusted gross income was $9.3 million. Currently he is in the second year of a Lakers contract worth up to $33 million. He also is paid to endorse Samsung mobile phones, and has a line of clothing.
Odom is a native New Yorker. He played for the University of Nevada in Las Vegas until 1997 when an investigation turned up evidence he’d been given $5,600 from a school booster. Following that incident, he played for one season at the University of Rhode Island before going pro. In his third season with the Los Angeles Clippers, the league suspended him for drug violations. He played one year for the Miami Heat, and joined the Lakers in 2004. Odom married reality TV star Khloe Kardashian in 2009.
You may like these other stories...
In Denver, state legislators are probably thinking, "Why didn't we think of this earlier?" The state of Colorado's retail marijuana sales (separate from medical marijuana sales) in January alone generated...
Business tax executives seem to agree with a majority of congressional lawmakers that tax reform is unlikely to happen this year.According to the 2014 Tax Policy Forecast Survey, which was released today by Washington, DC-...
By now, it’s pretty clear that it’s not about the money for former NFL players Hunter Hillenmeyer and Jeff Saturday.After tax authorities in Cleveland, Ohio, applied what the athletes said was unfair taxation...
Upcoming CPE Webinars
BAR is an acronym for: Boundaries, Authority and Role. This simple tool will provide participants with a solid understanding of leadership essentials to improve their performance.
This material is designed to provide a start-to-finish overview of how to plan and complete high-quality small audits efficiently.
In this session Excel expert David H. Ringstrom, CPA shares numerous techniques that you can use to work with charts more efficiently.
Key Accounting and Reporting Issues for Nonprofits No. 1: Overview and Statement of Financial Position
This material focuses on non-profit organizations organization, accounting and reporting.