The Atlanta Braves, the country’s only publicly traded Major League Baseball team, is facing off against the U.S. Tax Code in a lonely battle that threatens to cost the franchise millions. 

A little-known tax rule soon to go into effect will restrict public corporations from deducting the salaries paid to their highest compensated employees. For Atlanta Braves Holdings Inc., those employees are players — including first baseman Matt Olson, third baseman Austin Riley and former National League Most Valuable Player Ronald Acuña Jr. 

Privately held teams like the New York Mets, owned by Point72 Asset Management founder Steve Cohen, and billionaire John Middleton’s Philadelphia Phillies, won’t get hit by the tax. The Mets, for example, can deduct every dime paid to outfielder Juan Soto, a free agent lured from the New York Yankees with a record-setting $765 million, 15-year contract.

The team’s five most generously compensated players are set to collectively earn $96 million in 2027 — the year the new rule limiting salary deduction for all but $1 million of each of the top five most highly compensated players’ pay.

That amounts to a potential $19.1 million tax hike on the Braves, assuming a 21% corporate tax rate. The team paid $4.2 million in federal income taxes in 2024, according to a regulatory filing. 

The company had pre-tax loss in 2024 of about $36 million, when revenue was $662 million. Representatives for the Braves declined to comment.

The Braves will be at a significant disadvantage under the tax code, according to Douglas Schwartz, a Nossaman LLP partner who specializes in tax matters. The team would be particularly harmed when pursuing free agents because they’d have to factor in the additional tax burden, in addition to the contract amount when competing for top talent, he said.

The only other major league team owned by a publicly traded company is the Toronto Blue Jays. Rogers Communications, a Canadian entertainment conglomerate with nearly $20.6 billion in annual revenue, doesn’t expect any meaningful impact from the U.S. tax provision, according to company spokesman Zac Carriero. 

That leaves the Braves without any MLB allies in this fight, which requires congressional intervention before 2027 tax returns are due if they hope to dodge the new tax. The team hired a pair of lobbyists in February to bend lawmakers’ ear about the rule, according to federal filings.

There is, however, one other professional sports entity affected by the 2027 tax hike: Madison Square Garden Sports Corp., which owns the National Basketball Association’s New York Knicks and the National Hockey League’s New York Rangers. 

That may not give the Braves the most politically sympathetic bedfellow. The company, run by billionaire James Dolan, has been criticized for a state tax deal cut in the 1980s that has exempted them from $1 billion in property taxes. A spokeswoman declined to comment.

The Braves’ lobbyists may not find a receptive audience in Congress, according to a person familiar with the talks in Washington. Republicans like the tax because it raises much-needed revenue from a relatively unpopular source: big companies whose top employees earn millions. Democrats like it for the same reason, said the person, who asked not to be identified to discuss confidential conversations.

The Tax Code generally allows companies to write off employee compensation as a business expense. But efforts to curb those write-offs for multimillion-dollar salaries date back to former President Bill Clinton’s first term, after he’d campaigned on reining in corporate greed at a time when middle-class voters were reeling from jobs being moved offshore. 

The rule initially only applied to executive pay — not employee compensation — but it was broadened to include the five highest worker salaries as part of former President Joe Biden’s pandemic relief bill, with a delayed effective date until 2027.

Companies can lessen the blow by employing sophisticated tax techniques, including timing other losses to offset the higher tax bills, according to Deb Lifshey, a managing director at Pearl Meyer, an executive compensation and leadership consulting firm. Another option is to go private, which reduces oversight and regulation. 

“We always have companies that struggle with the question, is it worth it to be public?” Lifshey said.

For the Braves, finding a buyer willing to take the team private might be difficult. The team was spun off by Liberty Media Corp. in 2023 at a time when the sales tags for sports franchises were spiking — and the Braves were riding a high coming off a 2021 World Series win and had top stars locked into multi-year contracts.

While teams in other leagues — including the National Football League’s Washington Commanders and the NBA’s Boston Celtics — have broken sports franchise sale prices records in recent years, the market for baseball teams hasn’t been quite as lucrative. 

Private equity titans David Rubenstein and Michael Arougheti bought the Baltimore Orioles in 2024 for $1.7 billion, $700 million less than Cohen paid for the Mets four years prior. Mark Lerner and his family put the Washington Nationals up for sale in 2022, and took them off the market two years later after failing to find a buyer who’d meet their purchase price.

Absent going private or winning a lobbying effort, the Braves may end up saddled — at least temporarily — with a tax bill no other team in the league faces.

“I just don’t think Congress ever thought about this when it enacted the rule,” Schwartz said.

White House officials are preparing executive orders that would strip some environmental nonprofits of their tax-exempt status, setting up a possible Earth Day strike against organizations seen as standing in the way of President Donald Trump’s push for more domestic oil, gas and coal production.

The effort, described by people familiar with the matter, comes alongside other administration moves to use the U.S. Tax Code or government funding to single out groups that oppose the president’s agenda. It also follows years of scrutiny by congressional Republicans who have accused prominent green groups and other advocacy organizations of having ties to foreign governments and drawing funding from China. 

Even broader steps have been contemplated, including possible investigations of environmental nonprofits’ activities and changes that could stifle funding for non-U.S. organizations treated as charities, said the people, who asked not to be named because deliberations are private. The efforts could also have wider reach, extending beyond environmental groups to nonprofits that work on other issues as well as philanthropic organizations and foundations.

Trump has already called for Harvard University to lose its exempt status and suggested the Internal Revenue Service should tax it as a “political entity” after the school rejected the administration’s demand for changes. 

On Thursday, the president suggested that the White House could go further by revoking the tax-exempt status of other organizations, saying his administration will soon be “making some statements” about groups that are “so rich, so strong, and then they go so bad.” 

The president specifically invoked the nonprofit watchdog group Citizens for Responsibility and Ethics in Washington, saying “the only charity they have is going after Donald Trump.” Separately, congressional Republicans in a hearing last year singled out Code Pink, the League of Conservation Voters and the Natural Resources Defense Council for scrutiny. 

Any attempt to revoke tax-exempt status for prominent green groups would likely draw legal challenges, and it is unclear the effort would survive a court battle. 

Yet it would present an unalloyed threat to nonprofit environmental advocacy that has for decades helped champion limits on toxic chemicals, air pollution and planet-warming greenhouse gas emissions. It also could help defund a climate movement that has pressed U.S. states and institutions across the globe to slash their greenhouse gas pollution and shift to emission-free power. 

It would also mark another effort by Trump to confront work to battle climate change happening far outside the nation’s capital. Last week, Trump signed an executive order directing Attorney General Pam Bondi to take legal action against state laws or regulations that could impede the use of oil and gas, including policies meant to address climate change and environmental justice.

The consequences could ripple overseas too, affecting organizations in other countries that draw on U.S. support. For instance, a possible move under discussion to eliminate the so-called equivalency determination that allows foreign organizations to be essentially considered public charities could discourage grants from not-for-profit organizations in the U.S.

Some administration officials and supporters have warned that the effort would set a dangerous precedent, empowering similar attacks against conservative causes the next time a Democratic president is in the White House. 

Related efforts have already spurred bipartisan concern. After the House of Representatives last year advanced legislation that would give the Treasury Department expansive powers to revoke the tax-exempt status of not-for-profit groups, the measure stirred fears the power could be wielded by political leaders against organizations out of favor in Washington. 

The Internal Revenue Service determines whether a nonprofit loses its status, but the agency is supposed to enforce federal tax laws independent of partisan concerns. Organizations can lose their tax-exempt status if they are involved in political campaign activities or heavily involved in lobbying. Groups can also forfeit their designation if they have excessive income unrelated to their core mission or fail to file annual returns with the IRS.

An executive order singling out environmental groups could be among initiatives being readied for Earth Day next Tuesday, people familiar with the matter said. The timing and direction of the orders could change as different parts of the administration debate details. 

Trump has long criticized what he dubs the “green new scam,” and has vowed to undo government policies intended to fight climate change and promote emission-free energy. The president on his first day in office began the process of again withdrawing the U.S. from the landmark Paris climate agreement, and his administration is working to unwind a series of environmental mandates. 

Environmental groups present a challenge to Trump’s ambitions, having vowed to mount legal challenges against many of the administration’s decisions. A federal judge in April temporarily ordered the government to restore climate grant funding frozen by Trump while legal challenges play out in court.

Nonprofit groups and philanthropies have been preparing for confrontations.

“Philanthropy has a strong view that the storm is coming their way,” said Scott Curran, the chief executive officer of Beyond Advisers, a social impact consultancy. Curran said he’s been working with organizations, especially those that have drawn opposition in the past, since last year to shore up their governance and compliance in preparation for increased scrutiny.

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“I’m so glad tax season is over!” This is oft heard from some accountants. I cannot imagine why anyone would say this. If they feel that way, they should stop doing individual tax returns or limit their tax practice to business clients, try to eliminate some of the reasons that make it terrible for them or leave public accounting.

I loved tax season and cannot understand why any partner or owner did not like it. We make a lot of money, see and interact with a lot of clients, have opportunities to train and grow staff quickly, have a concentration of work that facilitates quick changes in our systems to gather and process information and we acquire value-laden intelligence about our clients’ long-term goals that enable us to generate added revenues while helping them achieve their goals. 

One reason I liked tax season is because I had staff doing most of the work the way I wanted them to do it using checklists and following the procedures and processes I set up and trained them on. I also worked hard to train my staff to reduce errors. I also did a lot of other things to ensure the quality of the work, add value to our clients and satisfaction to the staff, have fun and make more money. Pretty good way to run a business or a segment of a business. 

We did tax returns of all sizes, from clients’ kids and their retired parents to clients with over 100 K-1s and 1,000-page tax returns. Every return we did was treated with the same care and importance the client ascribed to it. No return or client was too small. Smaller returns were a good introduction and training for our new staff. I always had a few returns set aside for that. I never thought much about this until one day when one of our longer-term staff people remarked to a newbie that he did that person’s return when he started with us five years earlier. And then I realized the value of those returns.

I have been doing tax returns for some clients for over 50 years, and we’ve grown old together. We get a chance once a year to update each other on what is going on with our lives and families. These are nice relationships. Some clients had simple returns when we met that are still simple, but in between they referred some significant clients. You never know where a new client will come from. Also, some of the clients that started with us with larger returns are now large estate tax planning clients, financial planning clients or we manage their investments. The family tree of our clients has grown significantly from individual tax clients.

We did not take every tax client that came our way. I am very proud of recommending over 30 prospective clients to H&R Block in one specific year. We explained the reasons why H&R Block would be more cost effective for them, and circumstances when they should use us. We also told them about other services we provide, and they were welcome to call us with any financial questions, at no charge, plus we would put them on our mailing list as a way to keep in touch with them. While not much happened with most of these clients, some grew into tax preparation clients, some referred some very large business or special project clients to us, and some became friends. Not too shabby.

Tax season is a breeding ground for staff growth and nurturing referral sources, as well as a cash-generating business. Instead of being glad it is over, perhaps you should regret its end, or in any event be grateful for the great tax season you just completed.

Do not hesitate to contact me at [email protected] with your practice management questions or about engagements you might not be able to perform.