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July 13, 2017


International soccer star faces allegations of tax crimes

Lionel Messi is known throughout the world for his soccer abilities. The sports star has made millions off his success, making a profit from both his actual sporting ability as well as his image.

Unfortunately, his image took a hit when he was accused of tax fraud in 2016. The accusations included use of shell companies in an attempt to thwart tax collection efforts.

His defense: I didn’t know.

Messi states that he was unaware of the fact that his finances were being managed in such a way to violate tax laws. Does this defense work? In short, maybe. It is important to clarify that Messi’s case is based in Spain. In his situation, he faced a 15 month prison term after convicted for tax fraud. As noted in a publication by Forbes, the sentence was converted into a fine and he will not serve any prison time.

Those who are facing similar charges in the United States can learn from his case. The “I didn’t know” defense does play an important role when dealing with allegations of tax fraud. Many potential criminal charges hinge on whether or not the violation was willful. If the violation was not intentional, the criminal charges may not stand.

Be careful: Not really that easy.

Of course, simply saying “I didn’t know” won’t get rid of the allegations. In fact, in some cases criminal charges can still move forward if the Internal Revenue Service (IRS) can establish that you should have known about the wrongdoing. Simply signing off on documents put together by others who are in charge of your wealth is not enough.

In this case, Messi had specialists who put together the shell corporations. Although it appears the court found his statement of ignorance truthful, they also made it clear that ignorance is not always an acceptable excuse.

The same holds true here in the United States. It is important to ask questions about financial advice. Do not blindly accept advice and sign off on documents without an understanding of what is happening. This is particularly true if it appears the documents are designed to hide assets from the watchful eye of the IRS.

Protect yourself: Get legal counsel if the IRS asks questions.

If the IRS makes contact with questions about assets, it is wise to contact legal counsel. An attorney can review the situation and help to better ensure your legal rights are protected. Legal counsel is also wise if you believe your assets may not be in full tax compliance. An attorney can discuss your options and help you choose the best option for your situation.