BY CASSANDRA DUMP
Along with coaches who guide professional athletes toward success are those who train them in financial fitness , their accountants.
Various considerations are given to athletes in tax planning, compliance and consulting services.
Larry Campbell, a partner at accounting firm Lavine, Lofgren, Morris & Engelberg, says annual revenue growth for athlete clientele since 2003 has been averaging between 15 percent and 20 percent.
“It’s my job to provide completely objective third-party advice and to be a check and balance against all other advisers,” Campbell said.
Based in La Jolla and employing 71 , up from 64 in 2007 , four of Lavine Lofgren’s professionals specialize in tax return and fund management services for athletes. Out of the 1,900 clients served, 200 are professional athletes.
Campbell noted that the most significant difference between athlete and nonathlete returns is multistate taxation. That is, athletes must allocate a portion of their income to every state they play a game in. Additionally, athletes incur unreimbursed business expenses, including agent fees, union dues and certain portions of travel costs that are all tax deductible.
“Experts provide a better perspective and thought process for taking care of finances,” he said. “We deal with these situations on a daily basis and can offer our experience to best serve our clients.”
Marshall Faulk, San Diego State Univer & #173;sity standout football player turned National Football League Hall of Fame hopeful, says total wealth management is not as necessary as having a good accountant.
At the peak of his 13-year career, Faulk signed a seven-year, $45 million deal with the St. Louis Rams in 1999, according to a news report.
Faulk, now an analyst for the NFL Network, became more involved in managing his finances after losing a significant amount of money in the stock market following 9/11.
“I have my nest egg now,” Faulk said. “I know how to leave it there and not touch it.”
Nonprofit Tax Benefits
Among Faulk’s annual tax considerations is his Marshall Faulk Foundation, a nonprofit designed to raise and administer funds for existing programs with an emphasis in assisting young athletes.
Establishing a nonprofit is often recommended to a high-earning athlete, not only for the tax benefit, but also for the ability to allocate funds to those less fortunate in the manner the athlete sees most fit, according to Campbell.
“There are tax-efficient ways to give to charities and maximize benefits to the organizations and the donors,” says Bob Lofgren, founding partner of Lavine Lofgren.
Additionally, Faulk is a 10-year client of San Diego-based certified public accounting firm Gatto, Pope & Walwick. He was referred to founding partner and 27-year CPA veteran Charlie Pope by his attorney in the late 1990s for accounting services and has been a client of the firm ever since.
“Marshall has always been very responsive to and respectful of the advice I’ve given him over the years,” says Pope. “Likewise, I have been respectful of his opinions about his own financial matters. This has made for a lasting CPA-client relationship.”
Gatto Pope has 40 employees and provides accounting services to 4,000 clients. Charlie Pope has 500 clients, 50 of whom are professional athletes. He estimates 20 percent of his practice consists of athlete-related work. The firm’s one office located in downtown San Diego has annual revenue of $8 million, according to Pope.
High on the list of tax considerations for athletes is their state of residency, he said. Often, athletes meet the requirements to establish residency in the lower or no tax states, including Florida, Nevada and Texas. He says nonresident state filing is part of what makes athlete circumstances unique.
San Diego Chargers defensive captain Clinton Hart has never solicited the services of an accountant since he signed his first National Football League contract in 2002. He and his wife, Kelli Fuqua Hart, manage their finances with the help of a financial adviser and a personal banker through Bank of America.
“They advise us on where to put our money and we determine what works best for us based on their suggestions and our financial goals,” Hart says.