Sergio Garcia v. Commissioner

140 T.C. 141 (2013)

From our private database of 46,300+ case briefs, written and edited by humans—never with AI.

Sergio Garcia v. Commissioner

United States Tax Court
140 T.C. 141 (2013)

Facts

Sergio Garcia (plaintiff), a resident of Switzerland, was a world-famous professional golfer. Garcia had an endorsement agreement with a golf-products-marketing company called TaylorMade. Under the contract, TaylorMade paid Garcia a royalty in exchange for the right to use Garcia’s name, image, and likeness to sell products. TaylorMade also paid Garcia for attending events and performing certain personal services. The endorsement agreement was amended to reflect that 85 percent of Garcia’s income came from TaylorMade’s use of Garcia’s name, image, and likeness and 15 percent from Garcia’s personal services within the United States and other countries. Garcia wanted a higher allocation toward royalty income to pay taxes in Switzerland rather than in the United States. The allocation was not important to TaylorMade, but TaylorMade valued the use of Garcia’s name, image, and likeness more than personal services. The Internal Revenue Service (IRS) (defendant) issued a deficiency notice stating that Garcia owed more taxes. Garcia filed a petition for judicial review. Relying on a prior tax case involving another golfer, who had a similar endorsement deal but required that golfer to perform more personal services than Garcia was required to perform for TaylorMade, the IRS argued that Garcia’s income allocation was 50 percent royalty income and 50 percent personal-service income. The IRS also asserted that the royalty income that Garcia earned through TaylorMade’s use of Garcia’s image was taxable in the United States.

Rule of Law

Issue

Holding and Reasoning (Goeke, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 814,000 law students since 2011. Some law schools even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 814,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 814,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,300 briefs - keyed to 988 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership