I.R.S. sends guy bill for Bonds Baseball

TNTonPMS · August 21, 2007 10:27PM

I think they said he owes $150 K to the I.R.S. and it's not even sold yet .

What I want to know is how did they come up with the number they are wanting to charge the guy ?

I think that is absolutely ridiculous that the guy has to pay anything at all , let alone 150 grand !

I don't see what gives them the right to a piece of the pie Especially when it hasn't even been sold .

Morgoth · August 21, 2007 11:45PM

could someone post a link to the article? if true we should start the revolt now because the IRS is WRONG, WRONG I SAY.

bobbybakeriv · August 21, 2007 11:49PM

That is ridiculous. He hasn't earned a cent from the ball yet.

262Runner · August 21, 2007 11:51PM

$150K for a baseball that has a actual cost of about $15.00. If the ball sells for $500,000 then I could understand a tax bill.

mtcards · August 22, 2007 12:14AM

Sometimes you almost have to believe that the US Government is a subsidiary of Ebay with all the fees involved.

rube26105 · August 22, 2007 12:30AM

ha - i think they are, with cardsaveder/psa,and paypal stuck on the end with meg to boot!
randy

Leiascards · August 22, 2007 12:32AM

The may consider it a legitiamte Capital Gain. They probaly had an apraisser value it and charged 20% of that appraisal. 20% is what lettery Winners and contest winners usually have to pay off the top.

larryallen73 · August 22, 2007 12:43AM

I don't think the IRS has sent him a tax bill YET. I am NOT a tax expert but it would seem to me there should be no tax until it is sold and a gain realized? Until that time he has simply found an item that MAY be worth $500,000. Upon sale he will have about a $500,000 gain. Since it's a short term gain I think that would be ordinary income. Maybe he should hold for a year and sell as long term capital gain... 15% federal + state income tax.

bifff257 · August 22, 2007 12:45AM

Dang TNTonPMS, that is one big avatar/icon.

Who do you have to know to pull that one off...

Leiascards · August 22, 2007 12:46AM

I am not sure, but I think they can tax an item if they feel it is a significant asset. I think they can do it even beofre it is sold.

Carew29 · August 22, 2007 1:10AM

This falls under the same federal guidelines as the lady the won the Gretzky T206 Wagner card. Topps bought the card (paid taxes) and gave it away as a free prize. It doesn't devalue just because Topps gave it away. The lady who won it owed $250,000 in taxes on it. Which she inturn sold it for $600,000 to pay the $250,000. Gotta love our government!!

cravetopps · August 22, 2007 1:18AM

believe it or not, the IRS would say that the fan who caught the ball received income at the time the ball was caught and would be taxed based on the FMV of the ball. The ball would have to be appraised to determine the value. If the ball then sold for more than the appraised value, it would be a capital gain and result in more taxes, short or long depending on how long the ball is held. this is our governement in action.

milbroco · August 22, 2007 1:47AM

That is total bullcarp. Taxes should only be paid AFTER the sale. What if he donates the ball to the Hall of Fame or charity. Will the IRS let him write off $500,000.00 as a charitable donation or will they cry its only a $15.00 ball so the write off is $15.00?

dontippet · August 22, 2007 1:50AM

<< That is total bullcarp. Taxes should only be paid AFTER the sale. What if he donates the ball to the Hall of Fame or charity. Will the IRS let him write off $500,000.00 as a charitable donation or will they cry its only a $15.00 ball so the write off is $15.00? >>

If he donated it, they would let him write off the $500,000. He would owe no taxes. It would be an interesting tax form.

TNTonPMS · August 22, 2007 1:55AM

I'm trying to find something on the web about the story . . . . but I saw that story on Fox News this morning .

I really couldn't believe it because I have never heard of someone being taxed before any money changed hands , but I am not any kinda tax expert or anything .

I don't think it is messed up he has to pay some kind of tax or anything , it's just if the story is correct and they billed the guy before he even sold it I say to myself, damn , are they that hard up for cash ??

What I wanna know is , how do they know how much to tax the guy, it's not even sold ???

As far as the Large Icon Mr. Biff . . . I have no idea why that is like that , I was completely shocked when I saw it a few days ago .

I'm thinkin they just like the pic so much they dedcided to blow it up < Shrug > I just don't know , you're not supposed to be able to upload 10X10 for the icons .

stitzen · August 22, 2007 2:05AM

Fox news, that's your problem.

There's no way that the IRS would have sent him a bill already, if anything, it would come with his year end taxes due. Last report was that the IRS would likely not file any taxes due on it until he sells it.

lostdart58 · August 22, 2007 2:14AM

<< This falls under the same federal guidelines as the lady the won the Gretzky T206 Wagner card. Topps bought the card (paid taxes) and gave it away as a free prize. It doesn't devalue just because Topps gave it away. The lady who won it owed $250,000 in taxes on it. Which she inturn sold it for $600,000 to pay the $250,000. Gotta love our government!!

>>

The Wagner card was a different story as the Wagner card already had a predetermined value, since it had been bought and sold before.

BobaFett72 · August 22, 2007 2:14AM

They mentioned the tax implications on several other networks after he hit the homer.

The government needs to keep their hands out of our wallets.
I dont have a problem paying taxes after I sold the thing, but before? Screw em!

TNTonPMS · August 22, 2007 2:17AM

I don't know , I just saw it on there and figured I'd just share what I saw/heard . . . I don't know why they would say the guy was sent something by the I.R.S. if it weren't true , I'm not too sure if they would want to risk their reputation on a bogus story , especially the kind of story it is . . .

But , it wouldn't be the first time someone got their signals crossed .

I know I wasn't dreaming it ??
LOL, ya got me thinking now . . . . was I ?
No-one else has seeme to have heard about it .
< Shrug >

colebear · August 22, 2007 2:24AM

holy sh*t TNTonPMS, that is a huge avatar!!!!

TNTonPMS · August 22, 2007 3:08AM

Yea, I should change it though , I don't want C/U gettin pissed at me and kick me off . . .

It is sweet though .

Morgoth · August 22, 2007 3:30AM

If he sold it for $5 would he be able to show a loss? I think the US government wouldn't want this black eye and public backlash so I say they wait until it is sold to collect.

Carew29 · August 22, 2007 3:31AM

Just for $hits and giggles---what if Barry is found guilty and the ball is now worthless. Is the government going to return the taxed amount??

I would have this guy sign a contract with the IRS that if this bears out, that they are liable for paying back the taxed amount as the ball was only worth $15 at the time of the catch.

cravetopps · August 22, 2007 3:46AM

if he sold it for $5, but it was appraised for $100,000 and he paid the taxes on the $100,000, he would be allowed to take a capital loss but it wouldn't be a "wash' since his marginal tax rate on the income is higher than the capital loss tax rate. So, if he were in CA, for example, he would pay roughly $36K in taxes but then he would take a $28K "loss" on the sale. I think this is how that would shake out. carew29s question is essentially the same since the ball is $0 and not $5.

roastedcat · August 22, 2007 4:16AM

I say don't sell the ball, let him keep it and don't pay the IRS a cent.

TheCARDKid · August 22, 2007 5:40AM

Boy, the IRS sure knows how to garner positive PR. And you wonder why everyone can't stand them?

Sure, they could tax him after he sells the ball, but he hasn't made a cent on it.

Could he deduct the cost of his ticket (and parking) as expenses against the windfall gain of $500,000 or how ever much it is worth?

Archaninator · August 22, 2007 5:49AM

.

TomGshotput · August 22, 2007 6:11AM

I would gladly pay the taxes on it. First demanding that the IRS find me a buyer at what they appraised it for. Since we all know the ball is only worth what someone is willing to pay, if the IRS can't find someone have they committed fraud?

TNTonPMS · August 22, 2007 6:41AM

<< I would gladly pay the taxes on it. First demanding that the IRS find me a buyer at what they appraised it for. Since we all know the ball is only worth what someone is willing to pay, if the IRS can't find someone have they committed fraud? >>

---------------------------------------------------------------------------------------

That's what I'm sayin . . . somehow they determined a price on the baseball to tax somehow before it is sold , how did they estimate the value , all of the sudden they're in the Memorabilia /Future seeing business . . .

stitzen · August 22, 2007 7:00AM

The IRS has yet to tax the guy who caught the ball for income potential on it without selling it. There has been no official word from the IRS on it, and it's highly unlikely they will try to tax someone for catching the ball without selling it.

It's a moot point, however, has stated today that the ball is going up for auction.

WinPitcher · August 22, 2007 7:44AM

Actually the reason the IRS wants money up front in situations like this is because how would they know if it was ever sold at a later date?

they want the money upfront.

Yes this case would be known when sold but many other times situations like this they don't.

It is simply IRS policy.

Steve

TheVon · August 22, 2007 7:57AM

It seems unfair that the IRS would tax him now because they have to establish what they think is FMV. If this information becomes public, that seems like it could unfairly limit the kind of bids this guy would get for his ball. Who would pay $1 million for something the IRS just said is worth $500K?

I'm not saying the IRS wouldn't do this, just that it doesn't seem fair.

Leiascards · August 22, 2007 8:33AM

He stated his reasons for selling it is that he cannot afford to keep it. This tells me the IRS may have already contacted him about it and told him it would have to be taxed as a capital gain on his tax return.

stitzen · August 22, 2007 8:38AM

<< Actually the reason the IRS wants money up front in situations like this is because how would they know if it was ever sold at a later date?

they want the money upfront.

Yes this case would be known when sold but many other times situations like this they don't.

It is simply IRS policy.

Steve >>

IRS policy? Can you please post this policy from the IRS website, or give detailed facts on when this has happened with baseballs in the past?

They will not tax this guy before it's sold, and that's a fact.

Piman58 · August 22, 2007 8:51AM

So is this why the fans at Wrigley always throw the visitor home run balls back onto the field, to avoid tax complications with the IRS?

jrinck · August 22, 2007 8:54AM

<< So is this why the fans at Wrigley always throw the visitor home run balls back onto the field, to avoid tax complications with the IRS? >>

A visitor home run hit at Wrigley has no value, that's why they throw it back.

SoFLPhillyFan · August 22, 2007 9:03AM

I would tend to think that the Giants possibly had the fan fill out an IRS form as a formaliity. Kind of like casino or racetrack winnings, given that the perceived value is over a certain amount and the ball may be seen as being "won?" The IRS would then have been notified and in turn contacted the fan about the windfall.

From a Wall Street Journal blog on the tax implications. This was before the catch and posted by someone labeled "Tax Attorney." Other's posted their agreement -

1. The fan has an income (windfall under section 61) at the moment she catches the ball and takes the ownership of it, and not when she sells it.

2. The amount of income mentioned in Item 1 above is the fair market value of the ball at the time. (The fan may need to get an appraisal. For the tax treatment of the appraisal costs, see Item 5 below.)

3. The income from catching the ball is ordinary income. It is not a self-employment income, however, because the ball as a windfall does not constitute renumeration in exchange for personal services.

4. The profit upon sale of the ball is indeed a capital gain, and taxable at a lower rate if the fan satisfies the holding period. The ball should probably be treated as a collectible, however. Any long-term gain therefor should be taxable at 28 percent and not at 15 percent (or 20 percent if the sale occurs after 2008).

5. Once the fan includes the income mentioned in Items 1 and 2 above, her basis is the amount that she included in her gross income in the year of catching the ball. In addition, she may increase her basis further with any appraisal costs paid or incurred and any costs paid to sell the ball (e.g., broker fees or commissions).

TNTonPMS · August 22, 2007 10:26AM

NEW YORK — Matt Murphy could become $500,000 richer if he sells Barry Bonds' record-breaking home run ball.
The college student, however, may hang on to it — even if he's hit with a whopping tax bill.

"Part of me wants to keep it. It's the greatest American sports accomplishment in history,'' Murphy said Thursday on NBC's "Today Show.''

"Part of me might want to sell it, but I really am leaning towards keeping it. It's just too valuable, sentimental.''

Selling the ball for that amount would instantly put Murphy in the highest tax bracket for individual income, where he would face a tax rate of about 35 percent, or about $210,000.

Even if he does not sell the ball, Murphy would still owe the taxes based on a reasonable estimate of its value, according to John Barrie, a tax lawyer with Bryan Cave LLP in New York. Capital gains taxes also could be levied in the future as the ball gains value, he said.

On the other hand, he said, if the ongoing federal investigation into steroid abuse among professional athletes takes a criminal turn for Bonds, the ball's value could go down — which would likely allow Murphy to claim a loss.

bigjed · August 23, 2007 3:05AM

This is a joke.

If the ball fell back onto the field and Barry was given the ball would the IRS send him a bill for the tax?

Did Frank Thomas get a bill from the IRS when he received his 500 homer ball back?

goose3 · August 23, 2007 3:13AM

if he ends up truly owing this...and if he was smart...

I'd rent a brinks truck and deliver the 150,000 in nothing but loose pennies dumped into bins and taken into the IRS.

what a sham.

Our gov't is an embarrassment at times.

cravetopps · August 23, 2007 5:24AM

the fact is, he will indeed have to pay tax on the ball as if it were ordinary income. and, when he sells it, he will have a capital gain (or loss) depending on what the fmv was for the ball. it sucks, but he can definitely get the ball appraised and lower his tax bill as long as the appraisers are "experts". we all know the ball is not worth more than $100K, max. I think the appraisers would concur. this is not a $500K ball and even the IRS would not win a case against this guy since they are not experts, just greedy parasites who believe the government is entitled to screw citizens and squander your tax dollars as they see fit. bottom line, this guy didn't win the lottery but he did get a lesson in bloated government bureaucracy. and, if bonds retrieved his own ball, he would have to pay taxes on it just like anyone else.

AUPT · August 23, 2007 6:44AM

Just to mess with your minds . . . what are the tax implications if I caught the ball and
a) Threw it back on the field, or b) Sent it down to the dugout for Bonds?

twoinar · August 24, 2007 9:32AM

Where has the IRS been for every other home run ever hit? Every home run ball has some value, even foul balls. How can the IRS step in now when the stakes get high enough for them to bother? Maybe the guy should have ran away instead of being escorted by security while yelling his name. Couldn't the ball still be authenticated later if he actually did choose to come forward?

Allen · August 24, 2007 9:54AM

C'mon guys Lyndsay Lohan got 1 day in jail, Nicole Richie served 82 minutes, now the IRS is going to tax a guy on this, most everything in this country has become a sham or a joke.

The guy does seem to have a big head on him, trying to sell the hat and jersey that were game worn by him.

TNTonPMS · August 24, 2007 9:58AM

Absolutely, in fact they even used specially marked baseballs for that very reason , they also did the same with A-Rod when going for his 500th .

I suppose the way they see it they can't be on top of everyone and everything , They will keep their eye on the big money though .

If I were that guy , I would invest some of that money in hiring a tax professional to see if he might be able to find some kind of loop hole or something to at least try to keep a larger chunk of the large chunk the Fed wants to get from him .

But even in doing that, the guy would probably still lose out , maybe even more, Everyone always wants to stick their damn hand in your pocket , that's life though, I guess there really is no escaping it .

I wonder what would happen if he wanted to give it to the Hall of Fame ?

WinPitcher · August 24, 2007 10:59AM

hey will not tax this guy before it's sold, and that's a fact

Wrong

See sofla reply

also it was done to the person that won the wagner from topps. that person could not afford the tax and had to sell it.

IRS POLICY is simple in cases like these they want the money upfront.

NO I can't or won't show in what IRS publication this is found. I am speaking from memory only.

I like you am not a tax attorney.

I simply am repeating what i was told by one though.

OK?

Steve

TNTonPMS · August 24, 2007 12:01PM

I'm not one either, But I did stay in a Holiday Inn Express last night .

They certainly do want a nice chunk of it , that's for sure .

Arsenal83 · August 24, 2007 3:38PM

We actually had to study this exact situation in law school. Probably the only thing I remember from tax law. After the MacGwire/Sosa homerun race in '98, the IRS passed a tax bill which eluded specifically to home run baseballs of value. Because everyone began speculating that the record-breaking ball at the time was going to be worth in excess of a million dollars, the bill stipulated that the fan who catches the ball actually incurs income received at the moment the ball is caught and would therefore be liable for the tax implications at that moment based upon its FMV. If the ball is sold within a reasonable period thereafter, the FMV would be adjusted based upon the price realized. If anyone else has any knowledge on this, feel free to correct me if I'm wrong.

Brian

TNTonPMS · August 24, 2007 10:58PM

Very interesting . . . . I'm hearing more stories of this being a possibility of being true, than not .

When ya look at it though, even if they take half, he's still worth a hell of a lot more money now , than when he walked into the place .

It still stinks to high heaven though . . .

itzagoner · August 24, 2007 11:43PM

a good attorney would be able to prove that the Fair Market Value of a baseball is about $5.99 + tax

TNTonPMS · August 24, 2007 11:57PM

Man, that would be a case I would love to sit and watch being argued in court .

How often though do you think the state goes against the government , there is so much you give me this one , I'll give you that one .

What's messed up is that even after he loses the case , then he owes the lawyer a nice chunk as well , I'm sure he's not going to find a lawyer that is going to say , you pay only if you win, because it's not going to be an easy one to win .

Maybe the lawyer would do it for the exposure ??
I dunno . . .

My mom used to work for Louis Nizer, a very famous trial lawyer in Manhattan, that guy used to get some absolutley ridiculous rates , I would always see lots of famous people comming into her office , I met Jimmy Paige there I remember my mom being all excited , I was young and didn't even know who he was at the time .

I love watching good court battles . . . I should have applied myself better in school, that would have been something I would love to do .

I.R.S. sends guy bill for Bonds Baseball

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