Caleb Williams’ contract negotiations with the Chicago Bears ended on Wednesday when he officially signed his rookie deal. Part of his salary will go to an organization that is harder to negotiate with than the Bears’ front office—the IRS. Williams tried to find tax loopholes during his negotiations with the Bears.
The Chicago Bears finally got No. 1 signed on Wednesday
Reports surfaced Tuesday afternoon that Williams signed his rookie deal. However, Williams’ camp tried to get the Bears to forgo their future opportunity to use the franchise tag on him. The Bears refused Williams’ request, and Williams finalized his deal on Wednesday.
Caleb Williams wanted to avoid income taxes
According to Mike Florio with NBC Sports, Williams used his negotiations with the Bears to come up with creative ways to avoid paying income tax:
multiple sources tell PFT that there was an attempt to get Williams paid as an LLC. The Collective Bargaining Agreement doesn’t seem on the surface to foreclose that approach. However, the league decided that it does. The Bears were told by the NFL that the player’s money can’t go to a business entity other than the player.
A $40 million loan
Williams sees himself as a business, but the Bears see him as an employee on their team. Williams also attempted to earn his salary via a forgivable loan:
Another approach emerged from the concept of a forgivable loan, which would have resulted in Williams getting the money tax free until the loan was forgiven, as many as 10 years into the future. The Bears, through the NFL, also nixed that possibility.
One can’t blame Williams for trying to avoid paying income tax. At 4.95 percent, Illinois income taxes aren’t cheap, and combined with federal income taxes, much of Williams’ rookie deal will go to the government.
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