If you own a sports team, you could be hearing from the IRS in the near future.
Tax losses that owners claim from their sports properties are heading for higher scrutiny by the Internal Revenue Service. The agency announced last month that sports industry losses will be added to the list of items the Large Business and International department addresses.
The announcement comes when the IRS is armed with a $25 billion budget to increase enforcement, giving it the financial firepower to perform such audits. The extra oversight also comes when the Department of Treasury calls for more of them on wealthy taxpayers. Doing so would also help sort out some of the complex partnerships that come as a side effect of sports ownership that involve multiple parties.
Sports owners have long claimed considerable losses to the IRS despite having profitable teams as a way to get massive tax breaks, which the Internal Revenue Code permits. While the breaks are allowed under the code, the IRS likely wants to make sure no owner is claiming losses that aren’t allowed.
