Saints in $8.5M Tax Dispute

The New Orleans Saints are in a dispute with the Internal Revenue Service over an $8.5 million dollar "inducement payment" from the state of Louisiana, William Barrett of Forbes.com reports.

Saints ownership acknowledges receiving the payment, which it considers "working capital" and a non-taxable transaction. The IRS disagrees, claiming that the annual payment should be included as part of the team's income.

Instituted in 2001 to keep the Saints in New Orleans, these inducement payments were made to help the Saints improve their product on the field by assisting them in their ability to "acquire additional and higher-priced player contacts".

The disputed payment in the lawsuit occurred in 2003, but Barrett suggests that the payments have been received annually, and "a similar tax treatment position taken by the Saints in other years would have afforded the team cumulatively a substantial economic edge."

I wouldn't even remotely suggest, as Forbes does, that a tax ploy helped the Saints win Super Bowl XLIV. But for a team from a city located below sea level, they've certainly piled up a mountain of off-field distractions this off-season.

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