Castroneves Pleads Ignorance over Tax Money

Use your ← → (arrow) keys to browse more stories
Castroneves Pleads Ignorance over Tax Money

Indycar series driver Helio Castroneves claims that he has not seen any of the $5 million in licensing money as promised under his 1999 contract with Penske Racing.  The money in question is either still in Penske's possession or was deposited in a Dutch bank account.

The IRS, however, contends Castroneves owes income taxes on the money regardless of whether he was in possession of it or not.  A constructive receipt is at the center of the tax evasion case against Castroneves.

Legal experts claim that jurors will have to decide whether or not if Castroneves' deal was real, or a way to make it appear he did not have control of his Penske money.

The basis of this dispute originates on Oct. 31, 1999, when Castroneves was driving his final race for the soon-to-be-disbanded Hogan Racing. 

Greg Moore was in line to sign the original deal to drive for Penske Racing in the 2000 CART season, but was tragically killed in a crash in the 1999 season finale at Fontana, California.  Castroneves was named as Moore's replacement with the original deal intact with Castroneves' name in the place of Moore's.  The deal was worth a total of $6 million, $1 million directly to Castroneves and $5 million to license his name.

The $5 million was to be paid to a Panamanian company called Seven Productions.  However, the transaction was supposedly halted.  IRS and prosecuters contend this was a tax dodge on part of Castroneves.  They also claim that Castroneves secretly controls Seven Productions.

Castroneves' attorney Roy Black says the driver knew nothing of the U.S. tax laws and relied upon consultants to handle his financial situation.

Load More Stories

Follow B/R on Facebook