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If you’re an NFL football fan, then you’re likely aware that there were a number of (literally) mind-numbing hits on wide receivers this past weekend. These included vicious hits by Pittsburgh’s James Harrison, Atlanta’s Dunta Robinson, and New England’s Brandon Merriweather.
In case you missed them, here are some links to video clips on YouTube:
- Brandon Merriweather hits Todd Heap
- Dunta Robinson hits DeSean Jackson
- James Harrison hits Joshua Cribbs & Mohamed Massaquoi
Merriweather and Robinson got fined $50k each, whereas Harrison got fined $75k for his actions. Whether or not you agree with these fines, I think that we can all agree that they present an interesting financial question… 🙂
Can these guys deduct their fines as business expenses?
I actually addressed a similar question a few years back when Patriots coach Bill Belichick was fined $500k for videotaping an opponents defensive signals for future reference. At the time, a number of tax experts looked at the issue of whether or not such fines are tax deductible.
As I noted back then, the issue turns on whether or not the fines resulted from the offender breaking the law. If so, then they cannot be deducted. Short of that, “ordinary and necessary” business expenses are deductible.
According to Myron Grauer, Belichick’s fine was deductible because it was an “ordinary” expense:
“…in this day and age, it probably is â€˜ordinaryâ€™ for coaches and players in professional sports to cheat and, if caught, to be fined by the league, the fine levied on the Patriotsâ€™ coach can be viewed as an ordinary and necessary business expense.”
Mike McIntyre of Wayne State University went on to argue that:
“The fine was for violating a rule, not for cheating. No professional football game is played without someone breaking the rules. It is expected that people will break the rules.”
While I’m no tax expert, I would think that similar logic would hold for the three players fined this past week. They violated the rules, and such violations happen in pretty much every game. It is therefore expected that people will break the rules, sometimes to the point that they get fined for doing so.
What do you think? Tax deductible, or not? And beyond that… What do you think about the plays and the resulting fines? Did the NFL go far enough? Too far?
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