Tax man won't go after fans who return historic homers
Posted: Tuesday September 08, 1998 11:02 PM
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McGwire's 62nd home run Tuesday night never reached the bleachers, landing instead just over the left-field wall where no fan could get to it AP |
WASHINGTON (AP) -- Recognizing a bad call, the Internal Revenue
Service said Tuesday that any baseball fan returning a record-setting home
run ball hit by Mark McGwire or
Sammy Sosa
won't feel a tax pinch.
"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."
But McGwire's 62nd home run Tuesday night never reached the bleachers,
landing instead just over the left-field wall where no fan could get to it.
The ball was picked up by Tim Forneris, a member of the Cardinals' grounds
crew, who said he would give it to McGwire.
"It definitely will go to Cooperstown or you know Mr. McGwire, of
course, and then he can decide what he wants to do with it," Forneris said.
"I just don't want to be taxed."
That a grounds crewman snagged the ball may have rendered the tax
question moot. Since Forneris is an employee of the Cardinals and the home
run ball never reached the stands, legally it is probably still the
property of Major League Baseball.
Earlier IRS statements indicating that the valuable baseball might be
subject to taxes even if returned to the slugger drew jeers from the
Capitol and the White House.
"I thought it was a joke," said Rep. Bill Archer, R-Texas, chairman of
the tax-writing House Ways and Means Committee. White House spokesman Mike
McCurry called it "about the dumbest thing I've ever heard in my life."
To defuse the outcry, the IRS said fans wouldn't be subject to income
taxes or gift taxes if the ball is returned, comparing the situation to one
in which a person declines a prize or gives back unsolicited
merchandise.
McGwire, the St.
Louis Cardinals' first baseman, was tied with Roger Maris at 61 for the
all-time, single-season home run mark going into Tuesday night's game
against the Chicago
Cubs. Cubs right fielder Sammy Sosa, with 58 homers, also had a chance
to break the record.
The image of a supposedly friendlier IRS swooping down on fans who
return these historic baseballs instead of greedily auctioning them off
brought howls from members of Congress, some of whom immediately promised
to introduce legislation ensuring there would be no taxes due.
"It seems un-American to me," said Sen. William Roth, R-Delaware,
chairman of the Senate Finance Committee. "Instead of being commercial
about it, the fan is being generous and still being penalized for it. It
makes no sense."
Added House Minority Leader Dick Gephardt, D-Missouri, a huge
Cardinals fan who represents part of St. Louis: "Only the IRS could turn a
once-in-a-lifetime event into a once-in-a-lifetime Catch-22."
Typically convoluted tax code laws regarding estate taxes are to blame
for the confusion.
"Our tax laws are replete with provisions that defy common sense and
are patently unfair," Roth said.
Major League Baseball owns the balls until one reaches the stands,
where it becomes property of whoever manages to catch it. Most balls aren't
worth much, but home run No. 62 could command $1 million or more.
If a fan sold the ball, income taxes of some 40 percent would apply to
the proceeds, and that wouldn't change under the new IRS interpretation. If
the ball was kept, it would have become part of the fan's estate after
death and still taxed then.
The problem had to do with what would happen to fans who simply gave
the balls away.
Gifts worth more than $10,000 are subject to a 40 percent tax. The
first $625,000 is exempt under a lifetime gift tax credit, but the fan
would have then lost that credit toward a future estate settlement and
still would have had to pay taxes on the rest of the ball's value.
"This is another reason why we should abolish the current tax system,"
Archer said.
Copyright 2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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