Stop It

[1972Shocker]

IRS rules do not require loans be in writing. Verbal agreements can be valid. However, the IRS will always try to characterize a transaction in whatever manner most benefits the U.S. Treasury. The burden of proof is on the taxpayer. While you might be able to present enough evidence to support a verbal loan transaction it is always simplest to doucment the loan with simple promissory note which is very easy to do.

Not sure Fred's transaction would be of great interest to the IRS. If it is a loan it is not income to Fred but it is also not deductible as a business expense to the agent. If it is income to Fred then the agent would have a deductible business expense unless the payment is determined to be an illegal bribe under Fedral or State law (which may or may not be the case here). In that case, it is pretty much a zero sum game for the IRS to waste any time on.

Obviously, the best evidence that this was a loan is if it has been repaid which is an unknown based on the what has been reported.

[1972Shocker]

No doubt about it. And perhaps they might even be of some interest to the FBI as the RICO statutes are pretty broad but at this point I would say Fred and his Dad are pretty small fish.

Fred has little to worry about with the IRS. Even if they assess tax, penalty and interest on a $1,000 I think he can handle that. Certainly would not rise to a criminal case with the IRS. The IRS will be much more interested in some of the 6 figure amounts being tossed around.

If Fred and his Stepdad did, in fact, take this money and that did violate NCAA rules on his eligibility as an amatuer then the Shocks may well be looking at vacating some wins.

[ShockTalk]

Totally agree. Fred and his stepdad could be small fish to the NCAA as well. They seemed to put Bridges/Mich St on the fast track to an okie dokie. We'll see how fairly they treat everyone.

[Kung Wu]

I would bet that neither Fred nor his dad saw any cash at all. I bet this was a case of the agent picking up the airfare or lodging tab for FVV and/or his dad to meet with the agent and some NBA scouts after a couple of games.

And the agent can be devious ... "Hey, Fred, I have a ton of frequent flyer miles saved up, so I can get your dad to the MSU game free, if you want to meet a couple of scouts from Toronto? We can even put him up at the hotel for free on our account, because Adidas comps us a bunch of rooms throughout the year."

Sounds harmless doesn't it?