John Tavares' decision to not re-sign with the Leafs may come down to a legal matter
John Tavares has been battling with the Canada Revenue Agency over a $15.25 million signing bonus that was signed while he was an American citizen.
The former Leafs captain has been dealing with a tax code issue involving the CRA and his signing bonus that was signed back in 2018. Tavares' claim to the lawsuit is that he was an American citizen when he signed that bonus and was taxed at the under the IRS (internal revenue service) of the US tax guidelines.
If he was to lose this battle with the CRA, he could be taxed again at 46%.
That is a big chunk of his bonus getting taxed under the CRA code. Tavares seems to be fighting an uphill battle as it appears the likelihood of him winning this case is very slim. If he is found guilty of not paying this tax, this could be the deciding factor in him signing elsewhere, most likely with an American hockey club.
According to the Editor in Leaf, if this case does not favor Tavares, this could set a precedence on how signing bonuses with citizens from another county are handled.
He may opt to sign with an American team, preferably one in Florida, where the tax rate is much lower....If and when the hammer comes down on Tavares, Canadian NHL teams' lawyers will need to work over time in order to ensure that future contracts eliminate the possibility of issues such as the one Tavares currently faces.
On the brighter side according to Editor in Leaf, if he does win his case, he keeps his $8 million and walks away from court having won a major victory for all NHL players in Canada.
Whatever direction Tavares does go in after his last year with the Leafs, he will probably consider an alternate contract that may not include a signing bonus, unless he does go to play in Tennessee or Florida where the tax rates will be much better.
As Read On: Markerzone -
John Tavares' time in Toronto may be over due to legal dispute: he may have no choice
John Tavares' time in Toronto may be over due to legal dispute: he may have no choice
| POLL | ||
9 SEPTEMBRE | 174 ANSWERS John Tavares' decision to not re-sign with the Leafs may come down to a legal matter Do you think John Tavares' tax issue will be the deciding factor in his signing his next contract in the US? | ||
| Yes | 123 | 70.7 % |
| No | 51 | 29.3 % |
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