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By Eric Seidman, CPA | Wouch, Maloney & Co. LLP

The New England Patriots just pulled off a miraculous comeback to win their second Super Bowl in three years. Two years ago, they defeated the Seattle Seahawks and star running back Marshawn Lynch. Lynch had gained notoriety for his continual avoidance of the media and the resulting NFL fines. No player was fined more during the 2014 season than Lynch, who racked up $131,000 in fines, mostly for not speaking to the media.

While Lynch violated the NFL's media policy, did his fines actually generate tax savings?

Whether or not fines are deductible may be found in Section 162(a) of the Internal Revenue Code, which defines a deductible expense as one that is ordinary and necessary in the taxpayer’s trade or business.

Ordinary expenses are common and accepted in the trade; necessary expenses are helpful and appropriate for the business. These are different for every taxpayer: what’s ordinary and necessary for a professional athlete is not the same as what is common, accepted, helpful, and appropriate for a public accountant. Then again, what an interesting world we would live in if public accountants were interviewed by the press after finishing up a grueling tax return.

Getting fined this much money for not speaking with the media is uncommon. Otherwise, Lynch's press conference shenanigans would have been much ado about nothing. It’s also hard to make a case that the actions generating the fines were either helpful or appropriate since not speaking with the media didn’t impact his team's weekly game strategy. Under this guise, his fines wouldn't have seemed deductible.

However, a case could have been made that it wasn't his actions that should have been scrutinized under the ordinary and necessary rule, but rather the fines themselves. If Lynch did not pay his fines, the NFL would not allow him to play; thus necessitating payment to continue working. Using that as the basis, paying his fines is both accepted and appropriate. Additionally, NFL fines are common for a number of reasons, to the point that the league’s infraction schedule lists 18 finable offenses of varying assessments. All of this suggests that fines are ordinary and necessary expenses.

When discussing ordinary and necessary there are no absolutes. Landmark cases like McCulloch v. Maryland (1819), Welch v. Helvering (1933), and Deputy v. DuPont (1940) helped associate “necessary” with the synonyms convenient, useful, essential, appropriate, and helpful. The term “ordinary” was associated with habitual, usual, customary, common, accepted, and expected. Everything, however, reverts back to the nature of the transaction itself, as well as the taxpayer's intention.

One of the most common questions an accountant receives is whether or not an expense is deductible. There are no cut-and-dried answers, as the taxpayer needs to make the determination as to whether the costs incurred were common, accepted (ordinary), essential, and appropriate (necessary). This will undoubtedly be different for every taxpayer, as the example of Marshawn Lynch illustrates.

In Lynch's example, we don’t know if his accounting team deducted the fines, but based on the ordinary and necessary definitions, as well as the circumstances surrounding the fines, he may have had a good case.

Eric Seidman is a manager at Wouch, Maloney & Co. LLP in Horsham, Pa. He is a member of the PICPA’s Image Committee and Greater Philadelphia Chapter Federal Taxation Committee.