Top 5 This Week

Related Posts

IRS Alert: Ted Cruz May Owe Taxes On iHeartMedia Podcast Payments

U.S. Sen. Ted Cruz may have to pay taxes related to payments from his iHeartMedia podcast to a super PAC supporting him, according to tax experts.

The podcast has been in the public eye since it was found that iHeartmedia paid more than $630,000 in advertising -from Cruz’s podcast- to the Truth and Courage PAC, a group focused on “ensuring that Ted Cruz is re-elected to the United States Senate in 2024.”

Cruz has said he makes no money or directs revenue for the podcast, but tax experts have said he may still need to report the podcast payments as income to prevent the Internal Revenue Service (IRS) from flagging it.

“It’s still going to be his income, because he’s the one who ‘earned it,'” Brian Galle, a tax law professor at Georgetown University told the Houston Chronicle. “This isn’t like a charity that auctions off one hour of free accountant time or something … This was a payment for a series of appearances by Ted Cruz and not by anybody else.”

“You can’t tell the government it’s not my money if you’re the one who earned it,” Galle added. “It doesn’t matter where the money goes.”

Galle also told the Chronicle that the case is similar to a nun who works in a hospital and sends her salary back to the church. The nun receives a salary for her services and therefore has taxable income.

Calvin Johnson, a tax professor at the University of Texas at Austin, also said Cruz could be liable for taxes because the money is still supporting him thanks to the super PAC, which has also launched ads targeting his rival, U.S. Rep. Colin Allred, D-Dallas.

“The tax statute is perfectly clear that transfers in connection with performance of services — and that’s what this is — get taxed to the services,” Johnson said.

However, one tax expert isn’t so sure Cruz would be liable for taxes. Andy Grewal, an income tax law professor at the University of Iowa, said it would only be a violation if the senator was entitled to payment for the podcast, but told iHeartMedia to pay the PAC instead.

But because the original agreement is not public, there is no way to know if Cruz is liable for taxes.
Earlier this month, two groups filed a complaint with the Federal Election Commission alleging that Cruz violated federal campaign finance laws over iHeartMedia’s payments to the PAC.

Staff
Staff
Written by RA News staff.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Popular Articles

Award-App Footer

Download our award-winning app