Tax Policy & Professional Sports Organizations

I will be writing my paper about Tax Policy and how it relates to professional sports organizations. I understand that tax law and tax anything sounds (and quite frankly is) very boring, but if these organizations claim tax exemption and tax-payers are affected, it starts to hit close to home. FIFA will be the primary organization that I focus on, but I also want to discuss Major League Baseball (MLB) and the National Football League (NFL) because their relationship with taxes is more closely related to us, U.S. citizens. I will argue that professional sports organizations not only engage in tax avoidance arrangements but also influence tax policies in the domains in which they operate.

It is no secret that FIFA has been placed under the microscope for allegations related to corruption and bribery. Its president, Sepp Blatter, has been the center of these allegations, and he has casted a suspicious shadow since being elected president in 1998. FIFA has organized itself as a non-profit organization, and it is headquartered in Zurich, Switzerland. The prevailing notion as to FIFA’s decision to organize as a non-profit is so that FIFA can be exempt from taxes on its World Cup revenue.

I discovered an article from EuroSport entitled “Swiss government to crack down on FIFA.” This resource will be helpful in my discussion because it will reveal the Swiss government’s changing opinion on FIFA. Also, this article was written on December 5, 2014 so it is current. The government will likely pass a series of new laws which will tighten oversight of “approximately 60 sporting bodies based in Switzerland.” One of the laws would classify executives such as Blatter as “politically exposed persons,” which means he is someone who “could be abused to launder money.” Essentially, this new labeling makes Blatter’s alleged corruption charges more serious in the eyes of the government. Financial scrutiny of sports would increase as a result of this new classification, as other executives would be examined more closely. Another piece in this series would make FIFA and other sporting organizations “subject to new money-laundering laws drawn up by the Paris-based Financial Action Task Force.” Sporting organizations based in Switzerland are currently exempt from this group, but if FIFA, for example, were made part of this group, there would be greater oversight of its financial activities.

This particular website does not seem to be the most credible. It seems like a soccer version of ESPN. However, I found similar articles citing the same information on Reuters and Bloomberg, which are sources that are more reliable.


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