Giving spirit
IRS won't go after the fan who catches No. 62
Posted: Tuesday September 08, 1998 05:56 PM
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If No. 62 is caught by a fan and returned to McGwire, the IRS won't be looking for a tax bite AP |
WASHINGTON (AP) -- Gift tax laws will not apply to a baseball fan who
catches one of Mark McGwire's
valuable home run balls and immediately returns it, the Internal Revenue
Service said Tuesday.
"Sometimes pieces of the tax code can be as hard to understand as the
infield fly rule," said IRS Commissioner Charles Rossotti. "All I know is
that the fan who gives back the home run ball deserves a round of applause,
not a big tax bill."
The IRS said it wanted to clarify "press speculation" about whether a
fan might have to pay the taxes for returning McGwire's historic 62nd home
run ball, which he could hit Tuesday night, or by Chicago's Sammy Sosa, who
trails with 58.
Those stories sparked a round of criticism from Capitol Hill, where
bipartisan derision rained down on an IRS that was earlier this year
subject to stinging hearings focusing on its poor treatment of
taxpayers.
"It seems un-American to me," said Senator William Roth, R-Delaware,
chairman of the Senate Finance Committee.
Earlier, IRS officials said a fan who snags the record ball and
returns it to McGwire might be subject to a federal gift tax if the ball is
determined to be worth more than $625,000. Thus the taxman would come even
if the fan didn't get any money for the ball.
"The giver is responsible for paying any applicable tax on any large
gift," IRS spokesman Steven Pyrek had said on Monday.
Even the White House thought it was a politically stupid move.
"When I heard that, that was about the dumbest thing I've ever heard
in my life," presidential spokesman Mike McCurry said Tuesday. Asked if
Congress should pass a law to prevent such a tax, McCurry said, "I'm sure
that we probably support anything that would keep nonsensical things from
happening, but I'll leave that to the Treasury and the IRS to address."
Until the ball leaves the playing field, it is owned by Major League
Baseball. But once in the stands it becomes the property of any fan who
catches it or comes up with it in what is likely to be a mad scramble.
A person receiving a baseball or any other gift owes no taxes as long
as he or she keeps it.
Whoever catches McGwire's 62nd home run ball would have several
options besides giving it back to McGwire. They would include:
Keep the ball. The fan owes no tax immediately, but the ball will
become part of his estate, and be taxable after death.
Sell the
ball. The fan would owe taxes on any profit, probably putting him in the
highest tax bracket, nearly 40 percent. If sold for $1 million -- as some
have said the historic ball might be worth -- Uncle Sam would get about
$400,000.
On Monday, Mike Davidson, 28, came up with McGwire's 61st home run
ball that tied Roger Maris' record and passed Babe Ruth. Davidson said he
planned to return the ball to McGwire and wanted nothing in return.
Some collectors have suggested the ball hit Monday could be worth as much
as $100,000.
Copyright 2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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