Client Facts: Ben Lewis, 21 years old, is the most accomplished player on his college hockey team. He will likely be selected in the first round of the NHL draft. Needless to say, Ben is being wined and dined by several sports agents, and each has been providing Ben with incentives to be selected as his agent. These incentives range from extravagant trips to Rolex watches. This is all overwhelming for Ben, as he grew up in a small town in Ohio. His parents are also being courted by the agents in hopes that they can influence him on who to retain as his agent.

After finally selecting an agent, the time has come to negotiate with the hockey team that selected him. Ben relies completely on his agent in these dealings. Ben is interested in playing hockey, and he does not really care much about the financial details. Bens agent is in the final negotiating stages with the Seattle Emeralds. The potential offer is $5 million for the first year, a signing bonus, and incentive bonuses based on his and the teams performance. He will also receive fringe benefits in the form of health and dental insurance, life insurance, a team car, a clothing allowance, a travel allowance for him and his family, free tickets to each game, and all the training and fitness coaching he needs. A retirement plan is a separate benefit to be negotiated. Ben has come to your firm for tax guidance with regard to the package offered by the Emeralds, as well as the tax implication of all of the gifts he was given prior to signing with a teams. Provide Ben with a tax analysis of the compensation package. Suggest any tax planning that could help Ben maximize his lifetime wealth.

1.) Given the above information about Ben, what issues should be considered for purposes of creating a tax research memo?