IRS Targets Sports Teams as Agency Boosts Enforcement Against Wealthy Tax Filers

The Internal Revenue Service (IRS) will intensify its scrutiny of the sports industry’s reporting of tax losses, as part of its reported crackdown on wealthy taxpayers.

On Jan. 16, the IRS announced the “Sports Industry Losses campaign” which is “designed to identify partnerships within the sports industry that report significant tax losses and determine if the income and deductions driving the losses are reported in compliance” with the agency’s code. The IRS provided no further information in the announcement.

The agency’s focus on the industry could be the result of lucrative tax benefits that come with owning teams. Existing rules allow teams to write off intangible assets like TV rights and player contracts over several years. This accounting adjustment can enable team owners to report losses on their operations every year.

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