Here’s something you don’t see everyday — Texas is paying $1.7 million a year for a defensive coordinator, but it’s not paying the money to its defensive coordinator.
I would love to hear the rationale behind this. I’m hoping it’s some kind of bizarre, Saban-ish pushing the envelope kind of thing. If it is, watch Jimmy Sexton grab hold and run with it.
Get The Picture 
From a layman, so forgive me. But, does this mean that UT has contracted it’s DC requirements to a company? And, to think this through a little bit, in theory, a coaching staff could form a company that stands ready to fill positions for programs in need?
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Maybe the idea is that if the DC isn’t up to snuff PK Enterprises will just send UT another DC and UT won’t have to pay the coach a buyout.
Also, the DC won’t be an employee of the university.
That’s all I can think of off the top of my head.
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I guess that was your point, too, rigger.
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Mother-Fucker….
Skynet just became self aware…
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I love me some James Bond marathons. I own all of the movies.
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In lieu of withholding & paying taxes/1099 his company.
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Works for everyone.
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Yep. And some qualified plan tax savings. It’s all about the taxes.
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No rationale allowed when the new shiny toy in town is allowed to push and Get what they want…this is deep pockets my friends with noooo bottom in sight…mind you this ain’t the longhorn channel or TV dollar$ we’re talking, this is old, deep friggin money that is hard to compete with….just ask jimbo…
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Taxes. PK Enterprises looks like his own business.
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It is a nice try, but in the end, the case law in that area is pretty clear. If if quacks like an employee, it’ll be taxed as an employee.
This end around the irs rules isn’t groundbreaking or interesting. The dude is an employee of the university and will be taxed accordingly.
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Has to be a tax thing
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It could be as mundane as personal liability protection by using an LLC. The IRS isn’t picky about where the Social Security and Medicare tax comes from as long as they collect it. He might be able to deduct a few extra nuggets using an entity.
Query whether he elects to be taxed as an S Corp or a proprietorship. Might be able to play with the W-2 a little.
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This is purely a tax play. Pay my LLC and I’ll be as aggressive as I can on how i account for my personal expenses to minimize federal taxes. Throw in that there are no state income taxes in Texas. In exchange the university doesn’t have to provide a pension or in theory state employee benefits. The LLC is a 1099 independent contractor to UT.
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This^
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Roger that ^^^^
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I think this is a way for Texas to not have to be taxed by the IRS Exempt Organization on salaries in excess of 1 million. It is designed to benefit Texas but still get the man his pay.
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Good call …that makes a lot more sense.
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That is how I read it as well.
As to the S-Corp question, this is a pure personal service – there is no income allocable to capital. That is a known tax gambit to get around the Medicare tax and Social Security tax. But it’s clearly abusive.
See Veterinary Surgical Consultants, P.C. v. C.I.R., 117 T.C. No. 14 (2001); Pediatric Surgical Associates, P.C. v. C.I.R., T.C. Memo. 2001-81 (2001)
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Right. Interestingly, as an independent/1099 consultant he’s required to have all of his own tools, equipment, etc to do his job. Not allowed to have anything provided by the employer.
That said, I’m sure plenty of folks smarter than me said this was fine. I’m also certain that some from TAMU or OU has made the IRS aware of this situation.
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No University supplied cell phone? Coach Freeze approves.
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“plenty of folks smarter than me said this was fine.” “IRS”. Those word sent a chill up my spine, Mr Jack.
Two things that scare me shitless are mama bears and the IRS. I don’t fool around with either of them.
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Welp, like I have always said, there’s too much money flowing for it all to be “above board”. These TV rights deals sending $50mil to school’s for football won’t end well.
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