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Castroneves: Now a marketing liability?UPDATE A reader comments, Dear AR1.com, Regarding Helio’s future marketability after the trial is over and he prevails, I hope most people aren’t so naïve as to think that the IRS isn’t using Helio to send a message to everyone else. Think about it, the IRS has been working with Helio and his lawyer to resolve this issue since it first came to light back in ’03 or ’04 when he got audited. Then Helio wins Dancing with the Stars and he becomes a mass-market celebrity amongst common folk, not just open wheel race fans. So what does the IRS do, they decide to file charges to use him as a poster boy to scare the rest of us into paying our taxes correctly. Gee, is it just a coincidence that this trial took place in the run up to April 15th?
It happens every year and has been happening for decades. Leona Helmsley, Redd Foxx, Willie Nelson, Wesley Snipes, etc. Some beat the rap, some don’t; some went to jail, some just had all their possessions confiscated and sold off by the IRS. This case is so complicated, and involves concepts that even the best tax lawyers in the country differ in opinion on—and in the corporate world this happens all the time, and when a company’s tax advisor’s opinion differs with the IRS’s interpretation of the code, a judge decides what is owed, but no one goes to jail.
It is legal to try to minimize your tax burden, everyone does it; what is illegal is purposely hiding income. Helio’s tax attorney isn’t going to advise him to do anything that he KNOWS is illegal, but he is going to advise him to try to use interpretations of the code that benefit his client and allow him to defer and lessen his tax burden. If Helio is exonerated, no one should hold this against him. I hope he goes on to win the 500 a third time and gets more admiration and respect than ever—he deserves it. Name withheld for fear the IRS might target me too
04/15/09 Entering the fourth day of deliberations in the tax evasion case of Indy Racing League driver Helio Castroneves, series officials now have to be seriously wondering what will become of the month of May if he is cleared. Officials for Team Penske have intimated that they will put the wayward racer back behind the wheel if he is exonerated. Castroneves is charged with failing to pay taxes on $5.5 million earned between 1999 and 2004. Castroneves is claiming he’s innocent. But with deferred payments and off-shore accounts part of the discussion—fair or not—Castroneves, if exonerated, is going to be seen in certain circles as a guy who beat a tax evasion rap.
So, if Penske puts him in a car this May in Indianapolis, you have to wonder what the main storyline is going to be. I can tell you, it won’t be Ryan Hunter-Reay’s new Izod deal. While I’m sure there will be happiness within the open-wheel fraternity for the much loved Castroneves, the IRL marketing staff will be left to figure out how to spin this. While they’re likely to get kid-glove treatment from their new broadcast partner Versus, other media won’t be as kind.
And while some think there’s no such thing as bad media exposure, this type of baggage couldn’t come at a worse time. The league has made traction in some sponsorship circles and remains desperate to find a title sponsor by the end of this year. While the IRL will be trying to focus attention on its new sponsors, including Hot Wheels, Apex Brasil, Orbitz and the National Guard, many media outlets are bound to be laser focused on Castroneves and his case.
If somehow the two-time Indy 500 champion ends up in the winner’s circle—or even on the front row for the start, the media storm is sure to be intense. The way teams pay their drivers will almost certainly be explored by investigative reporters. What should be a glorious kick-off to the Indianapolis Motor Speedway’s centennial celebration, could turn into a bumpy ride. IBJ.com
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