Case settlement proves taxing for Neuheisel

Little in Rick Neuheisel's lawsuit against the University of Washington was ever as simple as it appeared. So why should the resolution of the suit have been expected to be any different?

Neuheisel's settlement called for UW to pay him $500,000 in addition to letting him keep a $1.5 million loan he had received in the fall of 2002.

But when it came time to put a pen to a check by the March 18 deadline, it was Neuheisel doing the writing, wiring the school $180,000 to help pay his share of what was suddenly a $680,000 tax bill.

As Paul King, UW associate athletic director for business and finance, explained it, the loan was classified as taxable income once it was included in the settlement. The $500,000 was also taxable, as was $125,000 in interest Neuheisel had earned on the loan.

That made for a total of $2.125 million that was suddenly taxable income. The taxes came to $680,000. So the $500,000 that was part of the settlement was sent to the government to pay that bill.

Neuheisel was also required to send $180,000 to the school to pay the difference, which the school then sent to the government, as well.

"We paid it as taxes for Rick on the whole deal," King said.

King said the money has already been sent and the settlement is considered a done deal.

Neuheisel also was awarded $2.5 million from the NCAA as part of the same settlement. That money might not be subject to the same tax rules, however, because he was not an employee of the NCAA while he was an employee of UW.

Neuheisel recently began work as the quarterbacks coach of the Baltimore Ravens.