Could Johnny Manziel Face IRS Scrutiny Over the Autograph Allegations?

Johnny Manziel was cleared by the NCAA in regard to receiving money for autographs. The NCAA acknowledged Manziel did not accept money, and still suspended him for the first half of the game against Rice. Basically, they could not get the autograph brokers to cooperate, and had no paper trail.

That doesn’t mean he is out of hot water,. Manziel may face an interesting choice when it comes to tax time in 2014, less than a month before the NFL draft.

David Gair, a Texas tax attorney, wrote this week about the quandary facing Manziel when it comes time to file his tax return.

Before we get to that, here’s what our Ty Duffy wrote when Johnny Manziel was questioned By NCAA and admitted nothing.

" Hypothetically, let’s say Manziel did accept an illicit cash payment for signing autographs. How does the NCAA prove it? Autograph barons may leak things to ESPN. They aren’t answering the NCAA’s phone calls (NCAA would need one to go on record). Manziel does not incriminate himself. He, likely, was smart enough not to deposit that money in his personal bank account the NCAA can access. Any recent expenditures he can plausibly attribute to fabulously wealthy parents. Compile mountains of circumstantial evidence if you wish. Trot out hypothetical bylaws if you wish. Unless the NCAA can obtain direct evidence a violation occurred, the Heisman-winning quarterback of a Top 10 SEC team will be playing football this year. And it will count. "

The NCAA ultimately lacks teeth. We have seen them get into trouble in the investigation process by going beyond their authority, but the NCAA had no power to force others to talk. The IRS, on the other hand? They could have the authority and pressure to bring on the autograph brokers if they determine it is a matter worth pursuing. Let’s hypothetically say that Manziel did take some money. The allegations were in the five figure range, and he is as high profile as it gets. If he does not report income, maintaining it did not happen, he is probably inviting at least an investigation and an audit. We have seen the IRS go after plenty of high profile athletes for tax reasons.

Here is what Gair advises, on the hypothetical that Manziel accepted cash (obviously, if he didn’t he can stand by that).

" What should he do at tax time? Report the income or keep up his story that he never got anything? He is stuck between a rock and a hard place. If he fails to report his income on his return, then he has just committed a crime. Willfully filing a false tax return is a felony that can net you three to five years in jail depending on the charge. But reporting the income on the tax return could be an admission that he violated NCAA rules. Between the two, if I were him, I would chose not to violate federal law. "

This story may not be over, even though the NCAA cleared him after the suspension. Manziel would certainly have a lot more to lose if he were in the NFL and invited an audit of his tax return, with the potential for criminal prosecution over some autographs. He doesn’t have to file until after the season is over and he has already moved on from Texas A&M. What will it say? He may not be the only one giving the “show me the money” sign.