Aroldis Chapman about to incur multi-million dollar tax liability

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Sharp observation by ESPN’s Jorge Arangure, Jr.:  If Aroldis Chapman doesn’t sign a deal and receive his bonus by Thursday at midnight, he’s going to get a multi-million dollar tax bill that he could have totally avoided.

Why? Because, Arangure reports, signing bonuses that are received outside the U.S., by a non-U.S.
resident, and in a tax year in which the person did not work in the
U.S., are not subject to U.S. taxation.  Chapman currently lives in tax-free Andorra. He hasn’t pitched in the U.S. Thus, any money he makes in 2009 can’t be taxed in the U.S. He will, however, work in the U.S. in 2010, so he will be subject to U.S. taxation on all earnings after the first of the year regardless of where he lives.   If, as expected, he gets tens of millions of dollars, that’s going to be a several million-dollar tax bill.

Arangure’s source on this, agent Joe Kehoskie, says “As far as I’m aware, neither the Hendricks brothers nor Rodney
Fernandez (who represent Chapman) have ever completed a contract for a
foreign free agent, so I bet this issue flew right under their radar.”

Maybe. But it may simply be that the market just hasn’t developed for Chapman like everyone thinks it eventually will, and that rushing to save a couple million in taxes now could cost him several more million in the value of the contract he ultimately signs.

Still, somewhere, the agent that Chapman fired to sign with the Hendricks brothers is smiling. And amending his lawsuit to claim that if he were still representing Chapman, he would have imposed a December 31st deadline to all interested clubs in an effort to avoid the bill.

Astros push ALCS to Game 7 with 7-1 stunner against Yankees

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There’s just something about playing in your home ballpark. The Astros decimated the Yankees at Minute Maid Park on Friday, riding seven scoreless innings from Justin Verlander and a pair of big runs from Jose Altuve to win 7-1 and force a Game 7 in the American League Championship Series.

Through the first four innings, however, the teams looked equally matched. Luis Severino no-hit the Astros through 3 2/3 innings, losing his bid on Carlos Correa‘s line drive single in the fourth. The Astros returned in the fifth to do some real damage, drawing two walks and plating the first run of the night with Brian McCann‘s ground-rule double off of the right field wall. Things didn’t get any easier for Severino. Jose Altuve lined a two-RBI base hit into left field, upping Houston’s advantage to three runs.

Verlander, meanwhile, muted the Yankees’ offense with seven innings of five-hit, eight-strikeout ball. While he didn’t come close to matching his complete game effort in Game 2, he was still plenty dominant against a struggling New York lineup. No player reached past first base until the sixth inning, when a pair of base hits from Chase Headley and Didi Gregorius gave the Yankees their first runner in scoring position. That didn’t last long, though, as Gary Sanchez grounded out on a 3-0 slider to end the inning.

In the seventh, Houston’s ace got into another spot of trouble. He walked Greg Bird on six pitches to start the inning, then plunked Starlin Castro on the wrist. Aaron Hicks struck out, in part thanks to a questionable call by home plate umpire Jim Reynolds, but it was Todd Frazier who presented the biggest threat after returning an 0-1 fastball for a 403-foot fly out to left field. Luckily for Verlander, George Springer was there to bail him out with a leaping catch at the wall.

The Yankees kept things exciting in the eighth, too. Aaron Judge ripped his third postseason home run off of Brad Peacock, taking a 425-footer out to the train in left field to spoil the Astros’ shutout. That was the only real break the Yankees got, however, as Altuve, Alex Bregman and Evan Gattis returned in the bottom of the inning to tack on another four runs, including Altuve’s solo shot off of David Robertson:

Ken Giles handled the ninth, expending 23 pitches and giving up a base hit and a walk before retiring Frazier and Headley to end the game. Thanks to Houston’s winning efforts, the two teams will compete in their first seven-game Championship Series since 2004 — and this time, at least one of them is guaranteed to come away with a win.

Game 7 of the ALCS is set for Saturday at 8:00 PM ET. Houston right-hander Charlie Morton (14-7, 3.62 ERA) is scheduled to face southpaw CC Sabathia (14-5, 3.69 ERA).