The IRS announced on June 18th that they will be looking at hundreds of high-income tax returns between July 15th and September 30th. They are expected to be looking at not only the taxpayer’s individual returns but any business-related pass-through entities as well. These reviews create exposure for athletes and entertainers who have high income and other business pass-through entities.

Unlike a conventional salaried employee, athletes and entertainers often have income that is not subject to withholding. For example, athletes and entertainers may receive income from endorsements of products or services and for appearances. In addition, they might have other business interests in which they receive income through pass-through entities. Although it is not an inevitable conclusion that sports and entertainment figures will be audited, the risk is real and merits attention. In the current environment, athletes and entertainers are advised not to “swing and miss” when it comes to seeking advice for what could be on the horizon.

Our professional tax experts are here to help you with your IRS tax compliance and review of your business activities if you are at risk of being audited. Contact us today.

About the Author

Brad Pauley, CPA, DirectorBrad Pauley
Tax, Sports & Entertainment
Brad Pauley is a Tax Director at KROST. Brad has over 20 years of experience providing tax advice, projection, and compliance services to clients in a variety of different businesses and industries. His areas of focus include high net worth individuals and their closely held businesses, including athletes, entertainers, service professionals, and owners/operators of real estate including like-kind exchanges. » Full Bio