Taxable Talk

I'm not a soccer fan. But if you are, the World Cup begins in just a couple of weeks. One of the favorites (based on what I've read) is Italy. But a scandal is clouding the picture.

International football (soccer, for us Americans) president Sepp Blatter was quoted in the Italian newspaper Corriere della Sera as saying, "This is madness. How is it possible that Italian soccer has stooped so low? This is the greatest scandal in the history of soccer."

So what happened? Allegations include rigging matches through corrupt referees, kidnapping a referee and two linesmen, wiretaps that show some of the alleged offenses, betting by players, embezzlement (through using public funds to chauffeur some of the ringleaders), and, of course, tax evasion. Another Italian newspaper, La Repubblica, said that Italian officials were investigating whether millions of Euros have been stashed at the Vatican Bank. The transcript of allegations runs over 1,000 pages.

Agenzia Giornalistica Italia reports that player transfers have led to tax fraud based on omissions of at least 70 million Euros. Three publicly traded soccer teams have seen their shares fall by 50% since the scandal broke.

For Italian soccer fans, this scandal, code named "Off Side" and dubbed by the Italian media "Operation Clean Feet," is the equivalent of the Black Sox scandal of 1919. It will be interesting to see the impact on the Italian World Cup team, and what charges (if any) are actually filed.

Links: AGI Story, The Australian (much more readable than AGI)

There was lots of activity this week among scofflaws and other tax cheats. First, the operators of a Middle-Eastern restaurant have been accused of skimming $16 million in cash from La Shish restaurants and sending the money to Lebanon. One of the owners is in custody; the other has apparently fled to Lebanon.

From Cleveland comes the story of a sportscaster who didn't pay between $12,000 and $30,000 in taxes. Bruce Drennan is the former voice of the Cleveland Indians. Mr. Drennan apparently debated the betting line on his radio talkshow, and then bet on the games. He apparently was a successful gambler...but he forgot to claim his winnings on his tax returns. Oops. He is also alleged to have been running a bookmaking ring. The Cleveland Plain Dealer has a full summary of the case here.

Mr. Drennan has pled guilty, and under a plea agreement will serve five months in prison and then five months under house arrest. Mr. Drennan, quoted by the AP, stated, "I am not being punished because I bet on games and lost...I am being punished because I bet on games and won, and did not declare those winnings to the IRS, and that's a crime, and I pled guilty to the that crime. It's wrong, and I'm sorry, and I'm going to pay the price for that."

Contrast Mr. Drennan, who admitted his wrongs, to our next lucky winner, Richard Hatch. As I noted a few days ago, Mr. Hatch was sentenced to over four years in prison. Survivor: Victorville is coming soon!

But our biggest loser comes from Washington state. David Carroll Stephenson was sentenced to eight years for conspiring to defraud the U.S. and for not filing three years of tax returns. Additionally, he must pay $8.5 million in restitution. Mr. Stephenson was behind "pure equity trusts." These trusts weren't worth the paper they were printed on, and were devised just to avoid taxes. My usual rule of thumb applies: If it sounds too good to be true, it probably is.

Churches don't generally pay income tax. They're non profits in the true sense of the word.

So why not create your own church? Take your salary, send it directly to the church (say, the Church of Russ), name yourself minister, and before you can say "Let us pray," there goes all of your tax troubles!

Hint: It had better be a real church.

Second Hint: If you take a vow of poverty, make sure you do so.

Or you could find yourself in trouble. Like the Incline Village, NV man who allegedly formed the "International Academy of Lymphology," assigning all of his income to the "church," and then obtaining tax refunds of $100,000 and not reporting income of $500,000. He faces three felony counts of false claims and three counts of tax evasion.

News Story: Las Vegas Sun

Last night I drove home from Las Vegas and the CSEA's SuperSeminar (well worth it, as usual; I'll have more on the seminars later). As you head out of the high desert from Barstow on Interstate 15, you pass a sign that says, "Victorville Federal Correctional Complex." There's a chance that our favorite Survivor contestant may soon be taking up residence there (or a Club Fed location near you).

Richard Hatch, who will be a charter member of the Bozo Tax Offender Hall of Fame, was sentenced to 51 months in prison. That was more time than expected. Although Hatch told the court before sentencing, "I believe I’ve been completely truthful and completely forthcoming throughout the entire process," Judge Ernest Torres didn't see it that way. "There’s no nice way to say it: Mr. Hatch lied," Judge Torres remarked. And that led directly to his sentencing.

So, finally, the Richard Hatch story is over. The moral? If you win a prize with 300 million witnesses, you had better declare it on your tax return.

You'd think that if you're a psychic you'd be able to just will your way to violence—you wouldn't have to throw any punches.

Sadly, our tax evading psychic apparently threw plenty of punches at his wife. David Guardino of Cary, NC has been free pending his tax evasion trial (which he also apparently didn't see coming). Joe Kristan has more on our not-so-pyschic psychic.