The father of NASCAR driver Brandon Jones is challenging a nearly $750,000 IRS tax assessment after the agency determined that his work managing his son’s racing career did not qualify as a legitimate business activity.
Joe Jones and his wife, Maryanne Pace-Jones, filed a petition in U.S. Tax Court on Nov. 6, disputing a combined $749,431.20 in proposed income tax deficiencies and penalties for the 2023 and 2024 tax years.
The dispute centers on Brandon Jones Racing LLC, the company the couple says has managed their son’s racing career for more than a decade.
According to reporting from Bloomberg Tax, the IRS determined that the company’s activities did not constitute a legitimate profit-seeking business. The couple strongly disagrees and is asking the court to reject the agency’s findings.
Why the IRS Is Challenging the NASCAR Family’s Business
At the heart of the case is a question that extends beyond the racetrack: Was Brandon Jones Racing LLC operating as a business with the intention of making a profit?
The IRS determined that the company did not meet the requirements for treatment as a legitimate business activity, resulting in disputed tax adjustments for 2023 and 2024.
Joe Jones and Pace-Jones argue otherwise.
In their petition, the couple describes years of work securing racing opportunities, managing sponsorships and overseeing the financial and operational responsibilities associated with their son’s career.
The filing states that Brandon Jones Racing LLC has operated since 2012, with Jones competing for organizations including Richard Childress Racing, Joe Gibbs Racing and JR Motorsports.
The couple also points to the company’s business practices, including maintaining financial records, using a business checking account and working with an accounting firm to prepare tax returns.
According to the petition, the IRS disallowed approximately $1.69 million in expenses and reclassified approximately $944,000 in company income as other income. The couple is contesting those determinations.
The filing describes the IRS notice as “erroneous, unfair, unreasonable, arbitrary, and capricious.”
Those are the petitioners’ allegations, not findings by the court.
NASCAR Driver’s Family Disputes IRS Findings
The family’s argument also relies on the financial history of Brandon Jones Racing LLC.
According to the petition, the company’s revenue increased from $18,920 in 2012 to more than $1.17 million in 2019. The filing lists gross revenue of $514,688 for 2024.
The couple acknowledges that the company incurred substantial racing-related expenses but maintains that those costs were part of operating a professional motorsports business.
The petition also references the company’s relationship with Joe Gibbs Racing and its efforts to secure competitive opportunities, sponsorships and other sources of revenue.
Joe Jones, who serves as executive chairman of Rheem, has been involved in managing his son’s racing career for years. The family argues that his work went well beyond simply supporting Brandon’s participation in NASCAR.
Brandon Jones competes in NASCAR’s O’Reilly Auto Parts Series, the sport’s second-highest national division. His racing career has included multiple victories and stints with several prominent organizations.
The petition asks the Tax Court to determine that the couple’s tax returns for 2023 and 2024 were accurate and that the disputed deficiencies and penalties are not owed.
The filing does not mean the court has ruled in the family’s favor, nor does the IRS assessment establish criminal wrongdoing. This is a civil tax dispute over the treatment of the company’s business activities, income and expenses.
The Tax Court will be tasked with resolving the disagreement over whether Brandon Jones Racing LLC qualifies as a profit-seeking business for the tax years at issue.
NASCAR Driver’s Father Takes IRS to Court Over Nearly $750,000 Tax Bill