New Jersey Nets former player Tate Claude George was properly assigned $79,000 in taxes and tax additions by the government, the U.S. Tax Court ruled Sept. 25.
George was incarcerated for all of 2013 and remains in prison today after being convicted of wire fraud in a real estate Ponzi scheme. When he failed to file a federal income tax return for 2013 after getting $208,111 from his NBA pension, the IRS made a return for him.
He argued his incarceration prevented him from making a tax return, that all the taxes he owed were already withheld by the NBA Pension Office, and that paying the balance the IRS assigned to him would create hardship for him and his family.
The court said the IRS properly determined he owed $70,318 in 2013 income taxes, including a tax code Section 72(t) additional tax on distributions from qualified retirement plans after getting an early distribution.
George also argued he shouldn’t be subject to $8,753 of tax additions because he was incarcerated, making the documents that would show deductible expenses unavailable to him. He said he didn’t think it was advisable to file the 2013 return without getting such potential evidence.
“While we appreciate the difficulties that incarceration imposed” for getting the information that could show he had deductible expenses that exceeded what the IRS assigned him as his standard deduction for 2013, he hasn’t described any expense that would qualify for a 2013 credit or deduction, Judge James S. Halpern said.
The case is George v. Commissioner, T.C., No. 26045-15, 9/25/19.