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By Michael T. Lahti
While professional athletes are famous for squandering their fortunes after retiring, the sad story of former baseball player Darryl Strawberry stand out as an example of what can happen when estate and financial planning is disregarded.
On January 20, 2015 taxpayers can join in an auction for the "right to receive on-going monthly payments" under the contract Mr. Strawberry signed with the New York Mets in 1985, according to a notice of judicial sale posted online by the IRS and Treasury. The minimum bid will be $550,000.
The contract ran from 1985 to 1990 and was for $7.1 million. $700,000 of Mr. Strawberry's 1990 team option was placed into an annuity with a 5.1 percent interest rate, according to ESPN. Part of that annuity was awarded to Mr. Strawberry's ex-wife as part of a divorce agreement in 2006.
Mr. Strawberry's ex-wife filed a chapter 7 bankruptcy petition in April 2010, and the bankruptcy trustee asserted a claim to the annuity based on the divorce settlement. The Justice Department Tax Division also asserted a claim to the annuity, which has been subject to a federal tax lien since 1999.
In September a Florida judge awarded the annuity to the IRS on the grounds that Strawberry had not fully paid $542,572 in taxes owed for 1987 to 1990 and owed $80,000 for missed payments in 2003 and 2004, ESPN said. The annuity is worth $1.28 million and is to be paid in 223 monthly installments.
Strawberry pleaded guilty in 1995 to one count of evading taxes on income received from autograph signings and promotional appearances from 1986 to 1990.
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