Tax experts have raised questions regarding payments linked to Texas Senator Ted Cruz’s podcast, suggesting that the Internal Revenue Service (IRS) may scrutinize the matter. These payments have been made to the Truth and Courage Super PAC, which supports Cruz’s reelection campaign. Both Cruz’s office and iHeartMedia, the broadcaster of the podcast, have denied that these payments constitute direct payment to Cruz, emphasizing that the senator is not compensated for hosting the show. They have also denied any legal or ethical violations. Cruz’s campaign spokesperson has asserted that the senator receives no income related to the podcast and did not direct any funds to be paid to anyone.
However, tax experts contend that even if Cruz was not directly paid by iHeartMedia, he may still be obligated to declare these payments as income to avoid potential IRS scrutiny. Brian Galle, a tax law professor at Georgetown University and former federal prosecutor in the Justice Department’s tax division, emphasized that “It’s still going to be his income, because he’s the one who ‘earned it.'” He drew a distinction from scenarios involving charities auctioning services, stating that “This was a payment for a series of appearances by Ted Cruz and not by anybody else.” Galle further noted that “You can’t tell the government it’s not my money if you’re the one who earned it.””
Calvin Johnson, a tax professor at the University of Texas at Austin, concurred that Cruz may need to declare this income despite not receiving personal compensation, as the funds ultimately support him through advertisements funded by the Super PAC. Andy Grewal, an income tax law professor at the University of Iowa, suggested that Cruz would only be culpable if he was entitled to payment for the podcast but instructed iHeartMedia to pay the Super PAC instead to evade declaring it on tax forms.
A spokesperson for Cruz’s 2024 campaign previously maintained that the senator appears on the podcast “three times a week for free” and dismissed allegations of wrongdoing regarding the $630,000 payment to the Super PAC as “mainstream media and the coordinating lazy attacks during an election year.” Rachel Nelson, iHeartMedia’s vice president of public relations, previously stated that the company’s payments to Truth and Courage PAC are “associated with those advertising sales” for the podcast and that Cruz “volunteers his time to host this podcast and isn’t compensated for it.” The matter remains unresolved, and Cruz will face off against Beto O’Rourke in November’s election.
