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Tax Court Divides Endorsement Income into Personal Service Or Royalty Earnings
The U.S. Tax Court decided that fees received by international pro-golfer Retief Goosen for so-called “on-course” endorsement deals constituted both personal service and royalty income. Goosen v. Commissioner of Internal Revenue, 136 T.C. No. 27. Goosen, a UK resident whose golf engagements have included some in the United States, entered into employment agreements with two companies controlled by his career and financial manager, IMG World Inc. Under this arrangement, Goosen's non-UK income was directed to European Tournament Organizers Ltd. (ETO), and his UK income to European Sports Promotions Ltd. (ESP). The U.S. Tax Court assessed tax underpayments against Goosen covering several years.
The court noted of Goosen's endorsement deals: “The TaylorMade, Izod and Acushnet endorsement agreements (collectively, the on-course endorsement agreements) required petitioner to wear or use [the companes'] products during golf tournaments. In contrast, the Rolex, Upper Deck [for trading cards] and Electronic Arts [for a video game] endorsement agreements (collectively, the off-course endorsement agreements) did not have this requirement.” Petitioner Goosen and the respondent tax commissioner agreed that the off-course endorsement income was royalty income. The on-course endorsement agreements didn't allocate the amount the companies would pay Goosen for personal services apart from the right to use the golfer's name and likeness. The tax court found: “Petitioner's endorsement income depended, however, on his playing in tournaments. The record shows that the performance of services and the use of name and likeness were equally important. We find that 50[%] of the endorsement fees petitioner received represented royalty income and 50[%] represented personal services income.”
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Second Circuit Reinforces Bankruptcy Code Settlement Payment Safe Harbor
The Second Circuit affirmed the lower courts' judgment that a "transfer made … in connection with a securities contract … by a qualifying financial institution" was entitled "to the protection of ... §546 (e)'s safe harbor ...."