Former WWE CEO Takes the Ring Against Claims of Tax Evasion

Having been a leader of the popular WWE, Linda McMahon is no stranger to battles. But she faces her own very real battle now that she is running for her state government. As with any political battle, the opponent against McMahon is using any potential ammo to fire against the senate hopeful.

McMahon's challenger and some of his supporters have grabbed onto the tax history of the WWE and are accusing the co-founder and CEO McMahon of tax evasion. She and her representatives assert that no intentional wrongdoing went into the payment (or nonpayment) of the business' taxes.

McMahon has been accused of tax evasion after it was discovered that the company didn't pay millions of dollars of owed taxes. A representative from the Democratic Senatorial Campaign Committee in Connecticut complains, "These documents paint a disturbing picture of a greedy CEO who cheated the state of Connecticut out of more than $4 million and didn't own up to her company's financial responsibilities until caught."

What McMahon's critics choose not to acknowledge is how complicated the tax system can be, especially for large businesses. The WWE defends itself by explaining that the lack of tax payment was due to a misunderstanding of tax laws pertaining to their business.

McMahon's former company, WWE, filed its taxes and apparently tried to take advantage of a broadcaster tax exemption. Their tax filing was challenged when the state didn't think the WWE qualified for that specific exemption. The WWE argued that they are in business within the broadcaster field. Still, the state disagreed. Ultimately, a settlement was made that the WWE would pay the reduced amount of $4.4 million.

This sort of tax confusion and subsequent settlement is incredibly common. Similar incidents like this happen every year in one way or another with many major businesses. In order to try to best avoid such a misunderstanding or to remedy it after the fact, a business should work with tax attorneys experienced in handling tax matters for businesses.

Source: The Hill, "McMahon's wrestling company paid $4.4 million to settle tax dispute," Alexander Bolton, Oct. 18, 2012

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