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June 5, 2016


Lessons from the Lionel Messi trial, part 1: setting the stage

Soccer star Lionel Messi is one of the most celebrated athletes in the world, with an income to match.

His position on the field is forward, not defender or goalie. But he now finds himself playing defense against criminal tax-evasion charges in Spain.

In this two-part post, we will take note of this highly watched case. We will also discuss the responsibilities of taxpayers for the contents of their tax returns.

Messi is Argentine, but plays for the Barcelona professional club. Spanish authorities allege that he and his father (who manages his son’s money) set up shell companies offshore to evade taxes on millions of euros of income.

Given Messi’s celebrity status, the trial naturally attracted considerable attention. On the courthouse steps, there were plenty of cheers from the crowd, along with at least one taunt to “go play for Panama.”

This was a reference to the so-called Panama Papers, a set of disclosures about the use of offshore accounts and shell companies to evade taxes. We wrote about the Panama Papers in our previous post.

The taunt was not out of the blue. Messi’s name was included in the Panama Papers.
In court, Messi said simply that he didn’t know anything about his taxes. He said he merely signed contracts and tax returns because he trusted his father.

The trial is taking place in Spain, not the United States. But if a U.S. taxpayer were to make such a defense, would that be sufficient? We will discuss that aspect of the case in part two of this post.

Tax Evasion