Basketball Player Sues IRS Over Foreign Tax Credits
Professional athlete Ryan Rossiter is challenging the agency after it rejected $1.28 million in claimed foreign tax credits.
Updated on Oct. 20, 2026 in Taxes
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Professional basketball player Ryan Rossiter has filed a lawsuit in U.S. Tax Court contesting the IRS rejection of $1.28 million in foreign tax credits. The dispute stems from tax filings in 2020 and 2021 regarding income earned while playing in Japan.
Why it matters
The case highlights the complex tax obligations faced by expatriate athletes and the rigorous documentation standards the IRS requires for foreign tax credit claims. Rossiter contends that he properly documented the taxes paid to Japanese authorities.
The IRS is seeking $1,284,076 in additional taxes plus $256,815.20 in accuracy-related penalties for the 2020 and 2021 tax years. The taxpayer claims these figures are based on rejected foreign tax credits totaling $1.28 million.
The players
Ryan Rossiter
He is a professional basketball player who competed for two teams in the Japanese professional league.
IRS
The Internal Revenue Service is the United States federal agency responsible for tax collection and the administration of tax law.
U.S. Tax Court
This is a specialized federal court that adjudicates disputes between taxpayers and the Internal Revenue Service.
The details
Ryan Rossiter, who played for two professional teams in Japan, asserts that the agency wrongly denied his claims on federal returns. The IRS maintains that the taxpayer owes significant back taxes and penalties related to those specific filing years.
Timeline
The tax dispute covers the 2020 tax year.
The tax dispute covers the 2021 tax year.
Ryan Rossiter filed his petition in U.S. Tax Court on October 13, 2026.
Market Dynamics
This case tests the eligibility thresholds and documentation standards set by the Foreign Tax Credit provisions under the Internal Revenue Code. It follows a pattern of high-stakes disputes between international earners and the IRS over the verification of foreign tax liabilities.
Taxpayers with international income must maintain meticulous records of foreign tax payments to avoid similar challenges during IRS audits. This case underscores the financial risk of accuracy-related penalties when deductions or credits are contested by federal regulators.
The takeaway
Taxpayers working abroad should consult with international tax specialists to ensure their foreign filings meet strict IRS evidentiary requirements. Proper documentation remains the primary defense against large-scale tax assessments and associated accuracy penalties.
Further reading
Learn more about reporting international income in the Taxes section.
Source note: This article includes information reported by Bloomberglaw.
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