Athletes and Taxes, Part I: A Discussion with Tax Expert Robert Raiola

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Mark Conrad
Hello and welcome to the Sports Business podcast with Prof. C, the podcast that explores the world of professional, collegiate, amateur and Olympic sports. I’m Mark Conrad or Prof. C from Fordham University's Gabelli School of Business, where I serve as professor of law and ethics and the director of the Sports Business Initiative. Taxes. If there is one constant in life, it is that just about all of us have to pay taxes on our incomes.

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Mark Conrad
Professional athletes are no exception, but given their incomes, they have to pay more and pay in many different locations because, unlike most of us, they perform their tasks in many states and many countries. How do they deal with large portions of their income going to the taxman? What can they do to limit their tax bite? With me is Robert Raiola, an expert in this field who has worked with over 100 professional athletes in the five major sports to give us some of the ins and outs dealing with the numbers, rates and different types and scales of taxes that athletes pay.

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Mark Conrad
Mr. Raiola is a director of the sports and entertainment group in the firm of PKF O’Connor Davies in Cranford, New Jersey. He has more than 20 years of experience in both the public and private sector. He provides business management, services, tax planning and business consulting to high net worth individuals and their families in the sports and entertainment industries.

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Mark Conrad
Robert coauthored the Winning Tax Strategies for Athletes and Entertainers, and has lectured nationally on the topic. He is a graduate of Pace University. Before we start the interview, which was recorded a few weeks ago, some updates. The first involves a change in California's tax law. As you'll hear, Mr. Raiola refers to California's top tax rate as 13.3%. It increases to 14.4% in 2024.

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Mark Conrad
Second, this interview was recorded before Shohei Ohtani’s unusual contract with the Los Angeles Dodgers was announced. Mr. Raiola has graciously agreed to join us again in a future podcast to discuss the tax implications of Ohtani's ten year deferred $700 million contract. Now we will start our podcast. Robert, welcome to the Sports Business Podcast.

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Robert Raiola
Thank you, Mark. Glad to be on Sports Business podcast with Prof. C. Thanks for having me.

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Mark Conrad
My pleasure. So let's go right to the questions. So the first question is how did you become interested in developing a practice that specializes in the taxes of professional athletes?

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Robert Raiola
When I was a kid, I was a big sports fan and then as I was growing up, I became interested in how they make money and how they keep their money. And I always say, It's not what you make, it's what you keep. So, you know, you have to be smart with the money. These athletes, I would have financial literacy be mandatory in the junior high school and in the high schools because I think that's important.

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Robert Raiola
And a lot of times you certainly don't get to have that topic, and that's not a good thing for them.

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Mark Conrad
And then as an adult, once you got into accounting, you were able to get into that area through people you knew or to circumstances or through to expanding a practice?

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Robert Raiola
Sure, the accounting firm that I was with merged with another firm, and the other firm had a sports practice. The guy who was in charge wound up being very knowledgeable in tax but not so knowledgeable in sports. So we did well together. We - I worked there for a couple of years and then we went out on our own, started our own practice.

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Mark Conrad
And right now is that the firm that has evolved from your own practice?

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Robert Raiola
No, it's not.

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Mark Conrad
So ultimately you joined another firm along the way and and as I said, and have expanded to 100 professional athletes, which is certainly keeps you very busy. So the next question would be, besides earning high incomes, what issues do professional athletes face that differ from many other high earning tax payers?

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Robert Raiola
Mark, you touched on this before. The biggest issue that they face is the state allocation using two particular methods. One is the games played method, not used too often, and the other more commonly used method is the duty days method. Duty day being a practice day, a film session day, a trading day, a rehab day, anything of those nature counts as income.

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Robert Raiola
And then within the your formula for allocating wages to estate. The other thing that's very interesting is that some of these states, the rates, if you add in the federal rate, which is 37%, max, the California rate in this question, 13%, and other payroll taxes, you losing over 50% of your income.

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Mark Conrad
And indeed, that is really a state by state situation. And we're going to get into some hypothetical cases dealing with that and to see what difference it can make depending on the states that the athlete plays in, tours in, travels in. And and these laws by the way, are, and would you say in, most states that have state income taxes?

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Robert Raiola
Yes, there are a few states that don't include income taxes. And matter of fact, one of those states was in the news yesterday. The Oakland A's announced that they're moving from Oakland with the highest rate, 13.3% to Nevada, no state tax. So the players will win out on the move.

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Mark Conrad
And we're going to break down those scenarios. In fact, let's do that right now because it really can make a difference. And it's fascinating. So let's start with one example. An NFL rookie signs a contract with a $30 million signing bonus to play for the New York Giants - who do play in New Jersey. How much of that money will go to state and federal taxes?

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Robert Raiola
Mark, the answer to that is roughly 50% will go. You have your federal at 37%. You have New Jersey at a whopping 10.75%. You have your Medicare, your Medicare surcharge. So you will be paying about 15% on that bonus. In other sports, like baseball and basketball and hockey, you can get a signing bonus. But if you have three conditions present, you will not have to pay.

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Robert Raiola
You will not have to allocate that to the state where you receive the bonus from, and that would be payable separately from salary, it always is; not predicated upon subsequent performance; and nonrefundable would be nonrefundable. If those things are present, you don't have to allocate in this example. It would be New Jersey, but it doesn't apply to football because the contracts, mostly, are not guaranteed.

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Mark Conrad
So let's say that it was another sport and fulfill those requirements for that tax year. The bonus wouldn't be paid in state taxes?

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Robert Raiola
Yes, the bonus would be allocated in the duty day formula and with the state tax allocation, you would the bonuses. You've got to take the fractured and the bonuses is included in the income. Yes.

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Mark Conrad
Okay. So let us say that the athlete and many athletes have residences in Florida and then play in New Jersey, play in New York, play in California, where Florida doesn't have a state income tax. So it would just be based on, say, the duty days that the athlete is in New Jersey?

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Robert Raiola
Yes. And if you think about it, football’s an interesting example, Mark, because in football, you have most of the days on a road game. You're in your state for six days in the State of New Jersey, and on a home game you're there for seven days. So when the percentages come out, it's about 85% of your income is taxed in New Jersey

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Robert Raiola
if you're a nonresident, and it would be 100% if you are a resident. But football's a tough one to get around.

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Mark Conrad
And also, there's a paucity of games in the season, too.

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Robert Raiola
That’s right.

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Mark Conrad
Right. So it's not that there's one game, and we'll get to some other examples of other sports dealing with that. So let's just say I think you may have answered the question, would the athletes save a considerable sum of money if he played or she played for a team based in Florida or Arizona, which don't have state income taxes?

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Robert Raiola
Florida does not have an income tax. Arizona does. They just lowered their rate to two and a half percent. So you would save a ton of money in Arizona and even more than that in Florida. Arizona is one of probably the only state that has a state tax which rate is that low. Most states would have higher rates of that.

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Robert Raiola
The Florida is one of, I believe, seven or eight states that do not have an income tax. So in our example above what the bonus, if it was, let's say, was basketball instead of football, you would allocate and if you had a big bonus, you'd allocate another to New Jersey and the bulk of it would be allocated to Florida.

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Robert Raiola
But, you know, I think New Jersey would look at that percentages and say, hey, wait a second, we don't believe it's bonus. We believe it's income. [...]

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Mark Conrad
I have you dealt with situations where state tax authorities have contested this sort of thing with athletes.

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Robert Raiola
Yes, we have. The two states that are most hellbent on getting your money are New York - not a surprise there - along with New York City and California. The only way you pay tax in New York City is if you're a resident. If you're a nonresident, you don't have to pay. But if you do have to pay between Fed and state, it's about 13, 14%, which is right on par with California.

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Mark Conrad
And so it's, would you almost advise athletes that play for teams in the big states to reside in a non tax state you think would be the worst of all worlds if that athlete had it's his or her domicile, say, in New York while playing for the Mets.

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Robert Raiola
Right. It's not as easy as you think because New York has 183 day rule. So if you spend 183 days or 184 days, you will be a de facto resident and then you're going to have to pay New York state tax and New York City tax on whatever income you have as a resident.

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Mark Conrad
And what happens in the season’s schedules that these leagues make? Do you think they try to schedule the season less than 180 days to avoid this problem for the athletes?

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Robert Raiola
You got to remember, Mark, especially in baseball, half the game, obviously have half the games on the road. So, you know, over a six month season, you're probably out half the time. You probably wouldn't, you know, jump into the hundred eighty three day rule, except when you have guys like Aaron Judge that, you know, put in his face, put up on a scoreboard of adversary at a hockey game or a Knicks game you know, these guys got to watch that days.

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Robert Raiola
I know it's not the most important thing to them, but whatever he's making, $30 million, that's a nice piece of change.

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Mark Conrad
And so let's just say back to our Giants player example. So let's say the Giants player’s paid a $10 million salary for the season and plays, say, about half the games on the road. So and possibly the team makes the playoffs hypothetically. But let's say two of those games are in California and one of those games would be in Illinois.

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Mark Conrad
So what kinds of taxes would he pay from his total salary and how would they be calculated first in the NFL? And then we'll talk about other leagues as well under those jock taxes.

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Robert Raiola
Where are we assuming that he's a resident, Mark?

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Mark Conrad
Let's assume he's a resident of New Jersey.

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Robert Raiola
Okay. So he would pay tax to New Jersey. The top rate in Jersey is 10.75%. He would also pay tax to California, which is, we touched on before, 13.3% and Illinois at 4.95%. He would get a credit in New York for the California tax and the Illinois tax. The California tax and the Illinois tax are calculated using the same thing

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Robert Raiola
the duty days [...]

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Mark Conrad
So he would get a credit to his home state.

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Robert Raiola
That's correct.

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Mark Conrad
Do many states do give that credit or are there states that don't? And the athlete could really be put in a very bad position tax wise?

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Robert Raiola
Good question, Mark. Most states give you the credit. However, if you if you play in Illinois and in California, you're only getting the credit at 4.95%. You can't take the higher credit than the tax rate is in that particular state. So you got to watch out with that too. And there are some states which have a reverse credit agreement.

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Robert Raiola
So in other words, if you're on the Padres and you play spring training in Arizona, you think you would get Arizona credits, roll the taxes paid to California? Not the case. It's a reverse agreement so that in California you would get credit for taxes paid to Arizona. So you need to watch that because if you don't, you're going to wind up with somebody owing a hell of a lot of money to one state and way over withheld in the other state,

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Robert Raiola
and that's not going to be a good situation.

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Mark Conrad
And so just to make clear, so for the games in California that this New Jersey resident New York Giant is playing, it'll be the percentage of the salary based on the number of days he would be in California.

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Robert Raiola
Probably three days at least. In football, if you're with the Giants, you're probably going to want to fly out there a couple of days before because you don't want to be jet lagged and all that. So most of the West Coast teams come in a couple of days before. It's not like Little League, just travel in the car the day of the game.

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Robert Raiola
You know, some days, if it's on the East Coast, the East Coast teams will be there for two days. But the West Coast teams will travel more and will have to pay tax for three days.

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Mark Conrad
And here's kind of a trivia question. What is your record in state filings for particular athletes? Like what is the most states that you've had to file or the athlete would have to file taxes through your help that you have encountered? List a number.

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Robert Raiola
Okay. I would say about 18 and 19, and that would probably be basketball, because basketball touches on a lot of states. And again, if you're a resident with taxing jurisdiction, you will get credit for taxes paid to other jurisdictions, however, limited to the rate in state where you are resident on.

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Mark Conrad
And, you know, these athletes are W-2 employees. They're not independent business people. So they generally cannot take many business deductions. So what kind of tools do they use or you recommend they use to try to limit this very high tax bite?

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Robert Raiola
The Tax Cut Jobs Act of 2017. They deleted a lot of the expenses, such as agent fees, union dues, spring training conditioning course, you know of that nature. All those were deleted for individuals and they were not allowed to deduct those things. So what we have to do is, what we'd like to do actually, is on the endorsement income an athlete makes if it's significant enough, will form an S Corp and will give a player a salary. In an S Corp formation,

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Robert Raiola
and when you form and have salary, up to a certain extent, you’re gonna also have distributions. The advantage of a distribution, it's not subject to Medicare or Medicare surcharge. So you can get, you know, get a little bit of advantage that way. You also could have what's called a Loan Out Corporation. Like we have a broadcaster; he works in all over the States and he's loaning his services to the company

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Robert Raiola
he works for, MSG, ESPN, NBC Sports, whatever it is. And then they pay. They don't pay him, they pay the corporation. The advantage of that is union dues, agent fees, conditions course - all the deductible. But as you can imagine, Mark, most of the employers, they believe you're an employee of that team, not of your own.

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Mark Conrad
And it's interesting that you talked about S Corps because, as opposed to LLC - limited liability companies, which generally in the law field these days is the more preferred way to start a business. But are you thinking of S Corps because of the separate corporate rate of taxation, although it may not apply to S Corps or let's say the limited liability aspect that athletes could have as part of an S Corp?

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Robert Raiola
Right. When you have a single member LLC you put that income on what's called Schedule C on your tax return. And if you have a multi-member LLC, you have a partnership, and you have to file Form 1065 which is a partnership return. We like to protect [...] liability.

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Mark Conrad
And that makes sense. So let's move on to another example. Now we have a National Hockey League player who resides in Ontario but plays for the Boston Bruins. Does he have to pay taxes in both the U.S. and Canada? First part of the question.

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Robert Raiola
Yes. That's very interesting, the U.S. and Canadian treaty. We see it a lot, especially with hockey players. The top rate in the province of Ontario, Canada, is 53.5%, which is whopping; huge number. However, if you get a signing bonus, Mark, that bonus is only taxed at 15%. So in other words, you get the short end of the stick if you take regular salary, but if you get a bonus, it's only taxed at 15%.

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Robert Raiola
Some other things in the treaty would be Canada and the US., if you have less than $15,000 of endorsement income in Canada, you won't pay any Canadian tax on that money.

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Mark Conrad
Now that's [...] the federal Canada tax at that the highest federal rate is 53%?

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Robert Raiola
Yes.

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Mark Conrad
Okay. And so now we get to the provinces and provincial towns. So we have Massachusetts, which has a fairly high income tax, and we have Ontario, which also has a pretty high income tax. So how would those taxes be added in?

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Robert Raiola
I'm sorry, Mark, let's clear up something. The 53.5% is the federal and provincial tax blended together. An interesting thing about Massachusetts, they used to have one of the lower tax rate at 5% net. Last year, what they did is they built a millionaire's tax. Over a millionaire of income, [...] 9% tax. So, you know, the Red Sox players, the Celtics players, the Celtics, having two players get maxed out deals and they're going to be paid a lot of money, but they'll be out of pocket a lot of money, a lot more money in Massachusetts than if they would have signed a couple of years ago when the rate was only 5%.

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Mark Conrad
That's obviously a big difference. And I think it's important to note that how the laws change and how, you know, you and anybody else in this business have to keep up with the changes in laws and regulations in the states and the provinces. Of course, from the IRS as well. So it becomes very complicated. And then we get to that example.

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Mark Conrad
Let's stay with it. And I'll give this as an example of what we call the Canadian road trip. For those of you are hockey fans and follow Eastern teams, inevitably once a season, there is a Western Canada road trip where the team is going to play in Vancouver, Edmonton, Calgary, Winnipeg, maybe Toronto, maybe even Montreal. So let's say we have players that go through this regimen every season

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Mark Conrad
that play for a team, say, in New York, Philadelphia, Washington, what have you, or even Florida. How are the taxes calculated in that way provincially?

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Robert Raiola
Okay, so the athlete is based in Toronto, correct?

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Mark Conrad
Yes.

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Robert Raiola
Right. In Canada, unlike in the U.S., you only pay tax on the province of residency. So that athlete would not have to allocate his income to Vancouver, Toronto, Montreal. Also [...], in the treaty, there's a bunch of states that don't recognize the treaty, like New Jersey and California. So you can conceivably, if you're playing for Toronto team, you're not going to have to follow a U.S. return, but you will file, you know, New Jersey, California.

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Robert Raiola
So a little unusual, a little opposite of what we do here in the States.

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Mark Conrad
And now what if the player was a US based player for U.S. team.

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Robert Raiola
U.S. based player, he would not pay Canadian tax, same thing holds but he would have to pay a job tax to the other states in the US.

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Mark Conrad
So he wouldn't pay the equivalent of a job tax in Canada. So that would be a fairly free income for him.

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Robert Raiola
That's right. I always say, Mark, it’s easy as ABC, anywhere but Canada and anywhere but California and the athletes laugh. They say it's not that easy.

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Mark Conrad
So actually that's interesting when you first meet with an athlete, let's say a younger athlete referred to you and does he have to come in with a state of shock about how much money is being taken out of his or her paycheck?

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Robert Raiola
Yes, they have no idea.

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Mark Conrad
They're not [...] even by the players association?

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Robert Raiola
One player said, I want to meet this Mr. FICA. Who is this FICA guy? The FICA is the 6.2%, which is capped at around $160,000. But everybody's got to pay. You, myself, anybody has to pay that.

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Mark Conrad
So many don't have at least the kind of advice to say be aware that your $30 million signing bonus or your initial salary is going to be heavily taxed.

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Robert Raiola
Like I said, Mark, it's not what you make, it’s what you keep, and on 30 million in the wrong state? He'd only take out less than $15 million.

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Mark Conrad
But he's not prepared to see that until it's, you know, too late.

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Robert Raiola
He will be in shock when he sees how much he netted.

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Mark Conrad
And then my question is, don't people advise the young athletes say, just as a warning, please be aware, there is Uncle Sam or Uncle Albany or Uncle Sacramento or whatever it may be?

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Robert Raiola
Yes, they do, but the athletes don't often listen. And look, I'm not going to say, you know, 30 for 30 show, you know, athletes go broke in this percentage of basketball player, this percentage of football players after five years or they're out of the league they go broke but they really have to be prudent with their money because they have a short frame - time frame - to make the money.

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Robert Raiola
Most athletes don’t have ten years in the league in their sport. If you do have ten years of, for example baseball, you get an excellent pension. I think it was 100% of salary you would get your last couple of years. So that would be a good thing to have.

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Mark Conrad
And you referred to the 30 for 30 episode on ESPN. I'll just make a note for listeners. That was an episode a few years ago about how athletes became broke and how they misspent their money. And that was a very illuminating episode where if you think you cannot spend $30 million or $15 million end up insolvent or bankrupt, think again. It's very possible.

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Robert Raiola
So, Mark, just one note on that. I got a client who said to me, Robert, I want to buy a T-Rex. I said, The last I heard of a T-Rex was when I was a little kid a T-Rex was referring to a dinosaur. But in his world, T-Rex was a three wheel vehicle and he went out and spent $40,000 on this three wheel vehicle.

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Robert Raiola
So not exactly good investment.

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Mark Conrad
No. And how long did he use it?

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Robert Raiola
Couple years. Yeah.

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Mark Conrad
And do you see that the athletes sometimes get family pressure or you sense family pressures?

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Robert Raiola
Yes. For sure. Some parents will be very protective over their son, and I can understand that, but they also are looking for a piece of the action. It's always a tough situation because if you give them a salary, it's going to be hard to stop giving them a salary. But if you give them a salary, you get the top deduction at a top income tax rate of 37% and they probably pick up income as a significantly lower bracket, maybe even 15%.

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Robert Raiola
So it's very difficult and it's always one of the biggest things you try to learn at the beginning of a relationship. Do mom and dad expect to have payroll? Well, mom or dad.

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Mark Conrad
And we've been focusing on male athletes because of the salary structure, but are you seeing an increasing number of clients who are female athletes?

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Robert Raiola
Yes, I actually just picked up a an equestrian award. I don't know what they call the woman's name for equestrian rider. And she had worked in the U.S. but never filed a U.S. tax return. So we're going to assist her in clearing that up. She was a resident of Canada, I’m sorry, Mark.

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Mark Conrad
And actually let's talk internationally because on more on the golf and tennis side where you have international athletes competing, coming to the U.S. and other countries and U.S. athletes competing abroad, and these athletes are not employees. They're independent contractors. So they're different. Do you represent or have you represented some of these athletes?

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Robert Raiola
Yes, we represented, for example, football players would be on point there. Basically when the teams go over there, Germany and the U.K., the top tax rate is 45%, not as bad as Toronto, Ontario, but you would get a credit in U.S. again, limited to our top rate of 37%. But think about it, the players don't like to go there because the travel is far and they have to pay extra tax.

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Robert Raiola
So I think that it would be interesting to think about would be, well, why not have a tax balancing situation? In other words, if they are paying more in tax, there's got to be some way we can, you know, knock that down a little bit and come up with an idea so then that's true if we're playing over the U.K., well, wherever.

00;27;01;02 - 00;27;19;05
Mark Conrad
I guess that would be up to Congress and the IRS to deal with that here. And of course, they want income. So I don't know how sympathetic they would be. But I think for the athletes, it would be certainly an interesting idea. But for the independent contractors, rather athletes more. Are there differences in how you prepare the returns?

00;27;19;05 - 00;27;29;02
Mark Conrad
Because it's not going to be be more based on 1099 income or equivalent thereof like winnings. So is there like more leeway for deductions for such an athlete than for a W-2?

00;27;29;05 - 00;27;51;02
Robert Raiola
Yes, because you're self-employed and this would also include single member LLC would also be on schedule C of your tax return and you would avail yourself the agent fees, union dues, kind of tough when somebody negotiated you a big contract and he comes in there with 4% and the player will say, I get the benefit of that.

00;27;51;08 - 00;28;02;01
Robert Raiola
The answer is no. On an employee [...] like the hockey player we dealt with before, not on the independent contractor. The independent contractor, they would be able deduct those things.

00;28;02;03 - 00;28;23;19
Mark Conrad
Right and more leeway to make deductions because they're basically running a business as opposed to being a pure employee. And so let's say we have a situation of a player was a citizen of France, and she plays in a number of tournaments in the U.S. as a tennis player. And let's say it's Indian Wells and U.S. Open and a tournament in Florida.

00;28;23;19 - 00;28;35;28
Mark Conrad
But Florida has no state income tax, so it should be clear there, but how would she deal with the Federal U.S. taxes, taxes in France, and taxes in states like New York and California?

00;28;36;05 - 00;28;49;19
Robert Raiola
Okay. The top rate in France is 45%, which is like the UK and Germany, and you would pay that income tax rate. So this is a person of french descent or an American?

00;28;49;25 - 00;28;52;06
Mark Conrad
No French citizen.

00;28;52;13 - 00;29;16;28
Robert Raiola
Okay, a French citizen. So I'm not that familiar with the laws pertaining to a French citizen, but I would imagine the treaty they talk about income and different type of income and how you tax it. I would imagine that you pay tax to Canada, sorry, to overseas in France and would pay tax in the U.S. and would definitely pay tax to New York and California.

00;29;17;00 - 00;29;35;16
Robert Raiola
It's easy to identify, Mark, with tennis player because if you go to Flushing Meadows and you spend two weeks there and you win the tournament, you don't walk away with a piece, a small piece of change. You're walking away with at least $3 million. So it's easy to identify where that income was earned because the tournament is all in New York.

00;29;35;19 - 00;30;08;26
Mark Conrad
Yes. And so the tax person will come in there. And I mean, there have been stories of athletes trying to move to other countries and other ways to try to limit the tax crunch. But it is very, very difficult. So let's move on. And from the jet setting professional athletes, let's talk about high school and college students now, because we are in the era of name, image and likeness and more and more young people are monetizing their images now that the NCAA has opened up this avenue.

00;30;08;26 - 00;30;20;20
Mark Conrad
And even in some states, high schools have. So what are the tax consequences of, you know, 19 year old basketball player for, for Fordham and gets NIL compensation.

00;30;20;23 - 00;30;49;03
Robert Raiola
So the NIL compensation would be deemed to be a 1099 income and they would be able to pick up the income, the deduct the expenses if they had any, open up what’s called a [...] plan to shelter up to 40% of their income if you count the state. And this is a really interesting situation because I don't believe...Two things: the athletes don't know that no tax was taken out on that compensation.

00;30;49;09 - 00;31;02;18
Robert Raiola
And the second thing is they may not be aware of that they have to go ahead and file a tax return. What we’re hearing is upwards of 50, 60% of the recipients of NIL payments are not filing taxes.

00;31;02;21 - 00;31;06;16
Mark Conrad
And have you had any clients in that space yet?

00;31;06;18 - 00;31;08;07
Robert Raiola
Yes, just a few.

00;31;08;10 - 00;31;19;29
Mark Conrad
And to be fair, most of the NIL deals are often influencer deals and there's really not much income. But there have been some multimillion dollar deals and I would suspect those would be the greater.

00;31;19;29 - 00;31;28;28
Robert Raiola
The better the prospect, the better the payment. They don't only get cash, sometimes they give it a car, leased a car for them as well. So you have to pay tax on that.

00;31;29;00 - 00;31;30;18
Mark Conrad
And is there a minimum on that?

00;31;30;25 - 00;31;47;03
Robert Raiola
If your income is over $400, you have to pay, you have to file a tax return. Now, a guy who got only $1,000, he's going to pay little or no tax. You'll pay some self-employment tax. You will pay any income tax and you probably will not pay any state tax.

00;31;47;05 - 00;31;50;29
Mark Conrad
So what do you think is the most satisfying part of your job?

00;31;51;01 - 00;32;17;03
Robert Raiola
We had a situation where January 7th of, I don't remember what the year was, 2015 say. We had an athlete traded from the Golden State Warriors to the Indiana Pacers. He started to get paid by the Pacers instead of the Warriors. Well, we realized a couple of weeks after he got traded there, was that he was paying Marion County tax of about 0.9%.

00;32;17;05 - 00;32;33;06
Robert Raiola
When we went to go do the return, we found out that the first year you're over there, you're not deemed to have been there for as long as he was. It's where you're resident of January 1st, not January 7th. So we got him back $75,000.

00;32;33;09 - 00;32;43;22
Mark Conrad
I'm sure he was pretty happy. Any other general ideas like how you you're enjoying this work, enjoy the people you deal with and any other satisfying aspects?

00;32;43;27 - 00;33;04;29
Robert Raiola
I like going to games, you know that that's something I like to do. Then my kids have developed a likeness with sports as well. My older son is a Red Sox fan because when he played Little League, the first team [...] was the Red Sox. So he's not a Mets fan like myself, but him and his brother are Red Sox fans.

00;33;05;01 - 00;33;13;24
Mark Conrad
Great, and what advice would you give to a young CPA who is interested in getting involved with athletes’ taxes?

00;33;13;26 - 00;33;36;14
Robert Raiola
I would say if they want to do on the tax [...] to get a bit of a background so you learn individual income tax and corporate income tax and then after a couple of years, maybe you transfer, you go to a different firm or you transfer into the department that has sports and entertainment stuff. You know, it's a good...I love what I do, but it's not for everybody.

00;33;36;16 - 00;33;41;09
Mark Conrad
And when you say it's not for everybody, what are some of the downsides?

00;33;41;12 - 00;33;59;20
Robert Raiola
Sometimes you deal with people that don't really understand financial situations and you have to explain it to them over and over again and they still don't get it. So it takes time to explain to people sometimes what happens. Now they're all not like that. There's a bunch of them that get it and understand what we do to save them money.

00;33;59;22 - 00;34;01;18
Mark Conrad
Hey, anything else you'd like to add?

00;34;01;21 - 00;34;04;17
Robert Raiola
Thanks for having me on the podcast. I enjoyed it.

00;34;04;20 - 00;34;30;14
Mark Conrad
Well, thank you for being on the podcast. On behalf of Fordham University, the Gabelli School of Business and the Sports Business Initiative, I'd like to thank you, Robert Raiola, for taking the time to discuss the intricacies of taxes for athletes. It's been a great pleasure. I also want to thank my producer, Victoria Ilano, for her great work in putting the Sports Business Podcast with Prof.

00;34;30;14 - 00;34;57;01
Mark Conrad
C together, and thanks to all of you for listening in. For the Sports Business podcast at Fordham's Gabelli School of Business, I’m Mark Conrad or Prof C, and have a great day.