Yankee Fan May Owe Back Taxes
Author: taxhelpers | Posted: 08.01.2012Derek Jeter hit a homerun for his 3000th hit on July 9, 2011 and the fan who caught it discovered he may owe back taxes for what he was given when he gave it back if the “gifts” were not declared. Christian Lopez received numerous gifts for his generosity only to discover a few days later he may have to pay back taxes next year if he was unable to afford the tax bill.
Many people are unaware that gifts are taxable if they are given for something else of value or received as a prize and owe back taxes as a result. In 2004 Oprah Winfrey gave everyone in her audience a car and they found out later that they owed back taxes, as well as penalties and interest, if they did not declare it on their tax returns for the year. Many would not be able to pay back taxes of around $7000 without selling the car.
Mr. Lopez hoped his parents would help him pay back taxes if he indeed owed them, so he could keep what the Yankees gave him for the ball. Their gift would not be taxable because they did not get anything from their son in return. He could owe back taxes of a considerable amount because of the value of what he was given. He was given four front row seats for a subsequent game, each worth $1358.90, as well as three bats, three balls and two jerseys, all signed by Jeter. He also got tickets to all the remaining home games the Yankees would play for the year. If the team played deep into October those tickets would be modestly valued at $50,000 and he might owe back taxes of $14,000 as a result.
The legal question of whether they are a gift or prize is whether the transferor is giving the property out of detached and disinterested generosity. It’s hard to imagine the IRS would consider the Yankees as generous in the transaction (Jeter and the team wanted the ball) so if Lopez failed to declare the items he would owe back taxes and would have to pay back taxes, penalties and interest, until the tax obligation was met to the satisfaction of the IRS. Mr. Lopez said he wanted to at least give his girlfriend one of the jerseys and a bat because she bought the tickets. Whether she might owe back taxes for that gift is a debatable.
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Prince Ahmed writes for Community Tax Helpers which offers IRS Penalties and Interest Tax problems with a wide range of services e.g. Release Tax Lien and Tax Settlement Companies.
Prince Ahmed writes for Community Tax Helpers which offers IRS Penalties and Interest Tax problems with a wide range of services e.g. Release Tax Lien and Tax Settlement Companies.
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