Every two years, a topic of conversation among tax folks is the tax treatment of Olympic athletes. One issue is whether the medals themselves constitue income — a tantalizing line is found in Commissioner v. Wills, 411 F.2d 537 (9th Cir. 1969), requiring Maury WIlls to report as income the value of the Hickok Belt he received for being named athlete of the year. The court noted:
The law as it presently exists requires the foregoing conclusion. We dislike it, for we are convinced it is an inequitable result. The next step would be for the Internal Revenue Service to tax the gold and silver in the medals awarded to Olympic Games’ winners.
Has the IRS ever attempted to tax an Olympic medal winner? Reg. § 1.74-1(a)(2) suggests that the value of the medal should be included in income. If so, presumably the athlete would be able to deduct his or her training costs as an offset.
The Washington Post raises a potential tax issue in the case of gold medal winner Joey Cheek:
Monday at the Turin Olympics, … [t]he North Carolina native blistered the slow, sticky ice at the Lingotto Oval to win gold in the 500-meter speedskating event. Then, he held reporters’ questions at bay at the start of his post-race news conference to announce that he was taking another cue from his idol and donating the $25,000 he would receive from the U.S. Olympic Committee for having won gold to the charitable organization … Right to Play, which uses sports and games as a tool for helping children in the most needy corners of the world.
Cheek said his donation would be earmarked specifically for children of the Darfur region in Sudan, where roughly 60,000 youngsters have been displaced, and he called on corporate sponsors of the Olympic Games to match his contribution.
$25,000 income, followed by a charitable deduction of $25,000 if within the percentage limitation rules?
There are international tax implications as well — Athletes Who Win Medals Will Owe Taxes. (Grover Norquist took up the athletes’ cause in Taxpayers Urge Clinton to Stop Australian Taxation of American Olympians.)
9 responses to “Tax Treatment of Olympic Athletes”
Perhaps member nations of the IOC should enter into a treaty (something similar to income tax treaties between US and its allies) not to double-tax medal winners. As for the US taxing US athletes on medals and other prizes, I think it only fair: Were Olympic winners to receive cash, we–tax professionals–would not feel as sorry as we do with medal winners. A medal winner’s tax problem is not of tax equity but of cash flow. USOC (or the US government) can help solve the problem by grossing up the overall taxes into any monetary compensation given to the winner.
One good egg, one scrambled mess
U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.Cheek captured the gold in the 500-meter speedskating event. Then he announced that he’s donating the $25,000 he will get from the…
One good egg, one scrambled mess
U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.Cheek captured the gold in the 500-meter speedskating event. Then he announced that he’s donating the $25,000 he will get from the…
One good egg, one scrambled mess
U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.Cheek captured the gold in the 500-meter speedskating event. Then he announced that he’s donating the $25,000 he will get from the…
One good egg, one scrambled mess
U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.Cheek captured the gold in the 500-meter speedskating event. Then he announced that he’s donating the $25,000 he will get from the…
One good egg, one scrambled mess
U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.Cheek captured the gold in the 500-meter speedskating event. Then he announced that he’s donating the $25,000 he will get from the…
One good egg, one scrambled mess
U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.Cheek captured the gold in the 500-meter speedskating event. Then he announced that he’s donating the $25,000 he will get from the…
One good egg, one scrambled mess
U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.Cheek captured the gold in the 500-meter speedskating event. Then he announced that he’s donating the $25,000 he will get from the…
One good egg, one scrambled mess
U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.Cheek captured the gold in the 500-meter speedskating event. Then he announced that he’s donating the $25,000 he will get from the…