Since 2020, the US Internal Revenue Service (IRS) has been stricter in checking the overseas assets of Americans. Taxpayers who hold assets and bank accounts abroad will face heavy penalties if they make false reports.
Considering the spiral decline of Sino-US relations in the past two years, it is not surprising that Morris became the object of "liquidation" at this point in time.
In American basketball, Randolph Morris, who graduated from the University of Kentucky, didn't make a name for himself in the NBA, and has long since disappeared.
However, in China basketball, he is one of the most famous and successful foreign AIDS in CBA, helping Beijing Shougang to create a prosperous time, winning three championships in four years and winning the MVP award in the finals.
I thought this was Morris's basketball legacy, but I didn't expect that when Morris stayed in his hometown in the United States because of the epidemic and didn't find the next stop in his career, he faced jail.
On February 25th, local time, the US Department of Justice announced that it would file a lawsuit against Morris, charging him with 1 1 tax fraud. The goal of the investigation by the Ministry of Justice and the IRS is nothing but Morris's eight-year career in CBA.
On August 20 10, Morris officially signed a contract to join Beijing Shougang. His salary in 20 10- 1 1 season is $600,000. The salary that CBA gave him in that year was after tax.
After the start of the season, Morris began to receive regular wages. 10, two salaries with a total amount of nearly 10 million dollars were paid to his account in the United States.
In the same year1February, Morris purchased real estate in Lexington, Kentucky, and became a resident of the city (that is, a taxpayer). According to the available records, his resident status was kept for at least 20 18 years.
As Morris became famous in CBA, his salary rose. By 20 15, he received a salary of $2.638 million in his American account, which was the highest income he earned in a single season during his time in CBA. His cooperation with Shougang lasted for 20 17 years. Including salary and bonus, his total income in these years exceeded13 million USD.
From 20 1 1 year to 20 17 year, Morris filed tax returns in Kentucky every year, including personal income tax in Kentucky and federal tax declared to the IRS.
The unified tax rate in Kentucky is 6%, and the United States federal tax has always implemented a step tax rate. Take 20 15 as an example, the federal tax rate fluctuates between 10% and 39.6%, and there are seven steps in a * * *, and the annual personal income exceeds 413,000 dollars, which is already the highest step.
Morris's annual income has exceeded this figure since 20 1 1 year, so he should pay nearly half of his income to the tax bureau every year.
The problem is, he didn't hand it in once.
Morris, who works in China, has already paid a large amount of tax in accordance with the laws of China (China has also implemented a step tax rate, and the portion exceeding RMB 960,000 is deducted at the rate of 45%). Why does he have to be taxed again and again when he returns to America?
This involves the concept of global income tax.
Any country has provisions for taxing citizens' income earned abroad. It's just that many countries have tax deduction and exemption policies, but the United States has none at all. You have to declare how much you earn in your domestic account, no matter where you work.
Morris failed to declare the money he earned in CBA, and now he is accused of defrauding the tax bureau, "obtaining money or property through false materials and fraudulent means".
From 20 15 to 20 17, Morris used H&: The online tax filing tool of R Block website declares federal and state taxes. In these three years, Morris's average annual income exceeded1million dollars, but it was not stated in the statements.
After the declaration, H&; R Block sent his electronic report directly to Kentucky Tax Bureau. Now, the tax bureau has determined that he "knowingly committed a crime" and deliberately concealed and cheated. "He knew that the information in the statement submitted to the state tax bureau was wrong and deliberately concealed the information from the authorities, because if it was true, he would pay a large amount of tax to the state government."
It is worth mentioning that when you search for the keyword "American citizens pay taxes overseas", the advertisement of this website is still very high. )
The Kentucky Inland Revenue Department filed three charges against him on the basis of the $403,000 state tax that was missed in the past three years. The US Internal Revenue Service filed eight charges against him for failing to pay millions of dollars in taxes from 20 10 to 20 17. Add up to a *** 1 1, and you may be sentenced to 20 years in prison and fined millions of dollars.
In other words, all the hard-earned money Morris earned by crossing the ocean in his life may be lost.
In the American professional sports circle, especially the NBA, athletes have high incomes and high taxes. Almost all NBA players belong to the highest federal tax rate. They face different state or city tax rates. For example, California's tax rate is as high as 12.3%(202 1 year), but Houston doesn't have to pay a cent.
In 2020-2 1 season, the average salary of NBA players was 7.92 million, excluding federal tax (2.93 million), stamp duty, brokerage fees and other expenses, leaving 4.49 million, and then continue to decrease according to local state taxes.
Some media have calculated that the book salary of a top-paid player like Curry looks considerable, but because he is in California and several taxes are deducted, he gets less than half of the book salary.
As a result, the zero state tax has become a major advantage of each team's operation, which can attract many players to join. Just like LeBron Wade and Bosch held a salary cut in the Heat in 20 10, because there is no state tax in Florida, their losses are not as big as they thought.
Moreover, superstars can afford professional elite teams to deal with financial problems (including not only tax returns, but also investment and wealth management, pension plans, etc.), but this is only a very small number of people. The vast majority of athletes, not only are financial professionals themselves, but also often encounter financial fraud under the banner of professionalism. There are also many players or referees who are planted in tax issues.
Iverson was sued by the IRS, accusing him of owing more than 600,000 yuan in taxes, and eventually he had to pay it back.
And the most serious financial fraud in American basketball &; The crime of tax evasion is nothing more than the ghost of Kermit Washington, who played for the Lakers in the 1970s.
The name may sound strange, but his career story may have been heard by all basketball fans: it was his boxing rocket star Rudy Tom Janovich's face that seriously injured him, which was also called the dirtiest move in NBA history.
In 20 16, Washington was charged with tax fraud. He conspired with Ron Meeks, a player of NFL Hall of Fame, to set up a charity, defraud donations and launder money, and also concealed income.
Washington used the connections in the sports circle to claim that all charitable donations would be used to help Africa, build clinics and hospitals, and help children infected with AIDS. But in fact, he squandered most of his donations, spending lavish holidays, shopping lavishly and even paying for his girlfriend's cosmetic surgery.
Of course, he didn't write the money into the tax return. From 20 10 to 20 14, he underreported his personal income by more than 90,000 dollars, and the excess benefit tax caused by misappropriation of donations reached 877,000 dollars, with a total tax arrears of 976,000 dollars.
He also runs an online shop in a charity, which sells goods worth about12 million dollars, many of which are unauthorized illegal pirated software, which is basically equal to empty gloves and white wolves. The defendant involved in the case was 1 1, which was the largest software piracy case prosecuted by the US Department of Justice at that time.
The American court accused him of multiple crimes, and finally convicted him of two crimes. He was sentenced to six years in prison without parole and paid 967,000 US dollars in compensation.
In the face of high tax rates, there is no rich man who doesn't want to try to escape (after all, the last US president is also being investigated for this). Messi, Cristiano Ronaldo and other top stars have been plagued by tax scandals. Although Morris didn't do anything unnatural, he just didn't want to be taxed twice, but the law was unforgiving.
Since 2020, the US Internal Revenue Service (IRS) has been stricter in checking the overseas assets of Americans. Taxpayers who hold assets and bank accounts abroad will face heavy penalties if they make false reports.
Considering the spiral decline of Sino-US relations in the past two years, it is not surprising that Morris became the object of "liquidation" at this point in time.
Despite all kinds of irrationalities, Morris's situation is a very rare case, whether in China or the United States, and it is difficult for the law to make any changes.
Even in Europe, where there are a lot of players and business exchanges, it is difficult for the government to really make concessions on the tax issue. Spain passed the so-called "Beckham Act" in 2005 to refine its policies for foreign taxpayers living in Spain (especially high-income people) so that such people would not bear the highest tax rates of two countries at the same time. However, in the following years, Spain made more stringent amendments to the bill, further narrowing the scope of beneficiaries.
Therefore, Morris can only accept it. Even if the law is not entirely reasonable and fair to him, even if he pays two rounds of taxes at the highest tax rate in China and the United States, his income will be beyond the reach of most people in the world for a lifetime. No one will really help him plead for his grievances with great fanfare.
Now he can only hire a reliable defense team, try to reduce charges and charges, and don't let his remaining sports career be abandoned.