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Floyd “Money” Mayweather’s Tax Troubles

Flody Mayweather Weighing InThe IRS is currently demanding boxer Floyd Mayweather Jr. pay his outstanding 2015 federal income taxes, amounting to about $22.2 million. In response, the boxer, who goes by the nickname “Money,” has filed a Tax Court petition requesting the IRS to grant him more time to settle his outstanding tax liability. However, tax lien documents from the IRS indicate that the boxer has been either unable or unwilling to pay his taxes on time over the past decade or so. In fact, the IRS has filed over two dozen liens and releases from those liens in Clark County, Nev., in Floyd Mayweather’s name since 2004. The lien documents reveal Floyd Mayweather has owed the IRS $3.1 million, $7.1 million and $6.1 million in outstanding taxes at various points. Despite earning hundreds of millions of dollars from fights and establishing his own boxing promotional firm, the boxer regularly accumulates huge tax debts, some of which have gone unpaid, according to public tax records, and this could have far-reaching consequences for the boxer.

Mayweather’s “Money” Persona

Floyd’s brand portrays him as being ridiculously wealthy to the point that he doesn’t give much thought to spending enormous amounts of money on expensive things, such as limited edition supercars. For instance, at one point in an interview with Stephen A. Smith, the boxer says his Bugatti is a “cheap” Bugatti because, according to the boxer, it is not the most expensive Buggatti money can buy. The Mayweather persona is about wealth and unlimited amount of money as much as it is about boxing. In fact, Mayweather calls his company, crew and lifestyle gear “The Money Team.” However, whether Floyd Mayweather is actually obscenely wealthy or just pretends to be, the reality is the boxer has failed to settle his tax obligations on several occasions since 2004. Public records from Clark County, Nev., show that the IRS filed tax liens against Floyd Mayweather in 2007, 2008, 2011 and 2012. The records also show the corresponding releases for these liens. However, the IRS has filed another lien this year (2017) against the boxer, claiming the boxer has not settled his 2015 tax obligations in full. In total, the IRS is demanding about $22.2 million from Floyd Mayweather.

Large Investments

It is important to note that the existence of these liens does not necessarily prove Floyd “Money” Mayweather is broke. Put another way, a person can be cash-poor but own high value assets such as valuable art collections, property and stocks. It is an open secret that Floyd Mayweather has plenty of high value assets that the IRS can put a lien on, such as his collection of expensive supercars. Still, someone who claims to be rich beyond imagination and whose brand revolves around money should be willing and able to pay his taxes on time. The boxer’s PR team has found a way to put a positive spin on the issue, with Mayweather’s tax attorney, Jeffrey Morse, recently telling Fight Hype, an online news resource, that

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Who Will Benefit From The Tax Breaks Under The GOP’s Newly Proposed Healthcare Bill?

The U.S. Capitol BuildingIf the GOP’s newly proposed healthcare bill, the American Health Care Act (AHCA), becomes law in its current state, it would change or repeal more than a dozen taxes that help fund Medicare and Medicaid subsidies under the Affordable Care Act, commonly known as Obamacare. The taxes targeted for repeal include taxes on corporations, as well as taxes related to individual income. According to estimates from the Congressional Budget Office (CBO), the federal government’s revenue would decrease by $700 billion over the next decade due to these tax cuts. The winners of the tax breaks under the GOP’s newly proposed healthcare bill include:

High-income Earners

The Senate bill will give high-income earners (individuals who earn at least $200,000 annually or couples that earn $250,000) a tax break by eliminating two Medicare taxes on such individuals. Specifically, it would eliminate the 0.9% Medicare payroll tax and the 3.8% tax on net investment income, including bonds, stocks, capital gains and interest, levied by the Obamacare to help fund Medicare subsidies. However, by repealing these two taxes, the federal government stands to lose about $231 billion in revenue over a 10-year period, says the CBO.

Healthy, Mid-income Earners

While Obamacare gives tax credits to low-income earners to enable them purchase health insurance through the Health Insurance Market, it caters only to individuals who earn less than $48,000. The AHCA, on the other hand, extends these tax credits to Americans who earn upward to $100,000. Moreover, the AHCA makes it easier for insurers to charge lower rates to young people. Obamacare allows insurers to charge the oldest enrollees up to three times as much as the youngest enrollees. Under the AHCA, insurers would be able to raise premiums for the elderly and at the same time, lower premiums for young Americans. In fact, according to estimates from the RAND Corporation, this policy would lower the annual health insurance premiums for the average 24-year-old American from $2,800 to about $2,100.

Individuals with Pre-existing Conditions

The Senate bill ensures insurers do not deny individuals with preexisting conditions coverage. Moreover, its “continuous coverage” protections prohibit insurers from charging such individuals more than the applicable standard rates. The bill also creates funds to assist states take care of individuals with preexisting conditions. These funds include the $100 billion Patient and State Stability Funds intended to assist states stabilize their individual markets by lowering costs and improving access for patients. The Invisible Risk Sharing Program will provide an additional $15 billion to help insurers cover high-cost enrollees.

Large Employers

Unlike Obamacare, the Senate bill would not require employers to provide their employees with affordable coverage. Consequently, companies will enjoy several benefits. Firstly, companies that fail to provide cover for their employees will not get in legal trouble. Secondly, large companies will have less work to do in regards to complying with reporting requirements. Thirdly, the federal government is likely to take longer to implement the tax on high-cost employer health plans.

Conclusion

If the AHCA, becomes

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The Tax Liability of Crowd Funding Campaigns

A woman browsing a crowd funding websiteDid you know that supporting a crowdfunding campaign by generously donating money, could have an impact on your tax burden?

The IRS’s reporting requirements for crowdfunding donations cover everything from personal donations to creating campaigns on crowdfunding platforms such as GoFundMe. This means that you should understand the potential consequences of donating money to a good cause to avoid getting into trouble with the IRS.

Tax Consequences to the Donor

As a donor, you may be unable to claim a charitable deduction from the IRS if the recipient of your contribution does not fall under section 501(c)(3). In such a case, your charitable contribution would not lower your taxable income, which means it would not lower your taxable burden. The IRS does not treat donations from one individual to another as charitable donations. Instead, it treats them as nondeductible gifts to the recipient of the funds. This means that such donations may or may not attract a gift tax depending on the total amount. Specifically, if your donations exceed the annual exclusion amount, which is $14,000 in 2017, you would have to fulfill the necessary reporting requirements and pay the relevant gift tax. On the other hand, if they fall below this amount, they would have no tax consequences, so you would have no reporting requirement.

Tax Consequences to the Recipient

If you are the recipient of funds donated by donors out of their own generosity, there is no tax consequence to you. This means no exclusion amount, no tax on the receipt of such gifts and the IRS would not treat your gifts as taxable income. However, the IRS requires third-party payment settlement entity (PSE) entities to file Form 1099-K if a payee’s receipts exceed $20,000 or when the payee receives 200 donations or more. That means that if you use a crowdfunding platform, such as GoFundMe, to collect and distribute contributions to you and your account attains one of these thresholds, the organization will use Form 1099-K to report your recipients to the IRS.

Additionally, the organization will send you a copy of the form as well. While receiving Form 1099-K can be disconcerting, it does not necessary mean that your tax burden has increased. However, you may have to explain to the IRS the nature of your crowdfuning campaign. In essence, you would have no tax consequence if the gifts to you were out of generosity. At this point, it is important to note that, if you offer contributors a service or product in exchange for funds, then the IRS would treat the receipts as taxable income, meaning they would have a tax consequence. More specifically, you would have to pay income taxes.

Mistakes to Avoid

When creating a crowdfunding for someone else, either a friend or a loved one, you should avoid listing yourself as the payee. If you do so, it would report under your Social Security number and this could cause several problems for you. Firstly, while the receipts may not attract income

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Jersey Shore Star in Tax Trouble

the Jersey shore boardwalkMike “The Situation” Sorrentino is facing serious legal issues together with his brother Marc Sorrentino. The duo have been indicted by the Department of Justice on various charges, including tax evasion and structuring and falsifying records. These fresh charges add to the Sorrentino brothers’ woes since they both currently have pending cases.

In 2014, they were charged on multiple tax-related cases. Mike faced one count for failure to file a 2011 tax return and one count for conspiracy. In addition, he was also charged with two counts of misrepresenting the facts in his tax returns between 2010 and 2012. When it comes to the latest charge, he is accused of structuring funds in an attempt to dodge currency transaction reports.

On the other hand, Marc is accused of falsifying documents with the aim to obstruct an ongoing grand jury investigation. The Feds initially alleged that while working as his brother’s manager, Marc evaded tax using two companies under their control. The entities in question are MPS Entertainment and Situation Nation.

The companies were registered as S-Corporations, thus making them pass-through entities. This means all expenses and income linked to the firms pass through to the shareholders (the Sorrentino brothers). The Department of Justice alleges that the duo purposefully collected funds from the entities to cover a wide variety of personal expenses.

It has been reported that the brothers used the money to buy expensive clothing, and flashy vehicles. The transactions were recorded as legitimate business expenses. They also are accused of understating income received by both Situation Nation and MPS Entertainment.

In 2011, Mike was accused of failure to file a tax return after netting an annual income of almost $2 million. The Feds state that he committed the offense by concealing his income, falsifying documents relating to the corporate return for Situation Nation. Additionally, he also failed to file personal return.

These charges are very serious, and I hope that the Sorrentino brothers have hired themselves a top notch tax attorney!

Floyd “Money” Mayweather’s Tax Troubles

The IRS is currently demanding boxer Floyd Mayweather Jr. pay his outstanding 2015 federal income taxes, amounting to about $22.2 million. In response, the boxer, who goes by the nickname "Money," has filed a Tax Court petition requesting the IRS to grant him more...

read more

The Tax Liability of Crowd Funding Campaigns

Did you know that supporting a crowdfunding campaign by generously donating money, could have an impact on your tax burden? The IRS's reporting requirements for crowdfunding donations cover everything from personal donations to creating campaigns on crowdfunding...

read more
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Cristiano Ronaldo Accused of Tax Evasion in Spain

Cristiano Ronaldo kicking a soccer ballThere is a very thin line between tax avoidance and tax evasion. Tax avoidance serves to reduce the tax bill of a taxpayer by using existing laws to their advantage. Tax evasion, on the other hand, is refusal to pay taxes or using fraudulent means to lower your tax bill. It is important to note that tax evasion is illegal and comes with not only stiff penalties, but also some jail time. Consider the case of Christiano Ronaldo, the FIFA world player of the year for several years. The Portuguese player is the star player for Real Madrid in Spain. Having helped his team win the UEFA Champions League twice in three years as well as the La Liga, Ronaldo is considered a hero by soccer fans around the world. Recently, Ronaldo was accused of tax fraud in Spain and the case is forcing foreign players in Spain to consider moving to other jurisdictions because Spanish laws seem to land players in trouble.

Beckham’s Tax Law in Spain

Ronaldo is charged with failing to pay €14.7m in taxes to Spanish authorities between 2011-2014. Spanish prosecutors claim that Ronaldo diverted €150 in advertising revenue to the Virgin Islands, a known tax haven, through a shell company. They claim that Ronaldo is supposed to pay a 24.75% tax rate on that income, which is the tax rate for foreign soccer players. This is commonly referred to as the “Beckham’s Law.” Players who are Spanish citizens are required to pay a whooping 48% tax rate on their income.

The main reason why Ronaldo has found himself in this legal problem is perhaps lack of proper tax advice. Ideally, he should have hired a Spanish tax attorney to advise him accordingly. The ideal attorney must have had a lot of experience offering tax advise to foreign soccer players in Spain, and none of them should have experienced any sort of tax-related legal problem.

Tax Laws in the United States

If you thought that tax laws in Spain were a pain, you might have trouble believing what sportsmen and women in the United States go through. This is because there are special state taxes on top of the state and federal income taxes. One type of special tax imposed by many states is the Jock Tax. There are also many other states that levy a special income tax, which is calculated daily. To ensure you are tax-compliant regardless of the state you visit or reside in, it is crucial you work with a competent tax attorney in San Francisco.

Who Should Hire a Tax Attorney?

Anyone who has multiple sources of income could potentially benefit by consulting a tax attorney in San Francisco. This could be from endorsements, advertising, salaries and wages, bonuses, commissions and special appearance fees. All these incomes are subject to different types of taxes. A tax attorney has in-depth knowledge of the IRS tax code, state-specific taxes and the applicable tax rates.

 

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Financial Advisers Must Play By New Rule

financial graph and calculatorOur tax attorneys learned this week that financial advisers will now be expected to play by a new rule that has the public’s best interest in mind.

An average citizen may not know what it means for a financial adviser to act under the fiduciary standard. The standard is defined by the Employee Retirement Income Security Act, which states that the financial adviser needs to act in the best interest of the client. Of course, this is a very basic definition, but it does get a little complex. It also states that the adviser must charge a reasonable fee to all clients to prevent unfair charges.

Of course, the advisor is expected to be an expert in the duties expected of a trained professional. All duties, skills, and attention to detail must be optimal. The financial advisor cannot have any conflicts of interests to ensure that the professional acts in the best interest of his or her client.

It should be noted that the rule only seems to require advisers to give fiduciary level advice on retirement accounts like IRAs or 401(k)s.

Consumers have probably received some information on these changes, which is likely going to change what kinds of services are offered and some of the prices they are used to. For example, fees for mutual funds and annuities will likely decrease. There are other investment options that will be likely lower.

Many financial advisers are probably going to move to a flat fee-based model rather than a commission-based model. Advisers who mostly work online might even opt for something like a subscription-based model to combat some of these price drops. There are other payment formats that some advisers might be exploring, and these are just some of them.

Just like with any shakeup of an industry, there will be several customers who are going to love the new pay structures or fees. There is also likely going to be a number of financial advisers who are not going to be too happy with some of these changes while others will love them.

Some do fear that these changes increase an advisor’s liability, and the cost of compliance might force the industry to drive prices up in the long run. This could mean customers are going to end up paying more for the same types of services.

The services provided must be compliant with this new regulation, so it should help more people trust advisers. It is also possible that some customers are not going to like the cost of advice, so it might drive some people away from the service.

There is no telling what is going to change in the industry, but it is important to start communicating these changes to customers so that they are aware. Most experts are very excited to offer this kind of promise to customers, and they believe it will ultimately prove helpful for the entire industry. Only time will tell how things will work, and hopefully, the changes help propel the

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