Until the mid 1980’s, prizes and awards were not taxed. But then the tax-grinch decided to steal Christmas with the Tax Reform Act of 1986. It says by law, cash prizes must be reported as income."
Austin, TX (PRWEB) August 09, 2012
Last week, Americans for Tax Reform pointed out that Olympic athletes are required by law to pay taxes for winning a medal. This news is creating outrage from Americans who can't understand why these heroes would be punished for representing their country in the Olympic games. The question is can the IRS really tax Olympic medal winners or is this just a myth?
"Until the mid 1980’s, prizes and awards were not taxed," says Elevation Group Exposed writer Bob Samms. "But then the tax-grinch decided to steal Christmas with the Tax Reform Act of 1986. It says by law, cash prizes must be reported as income."
In addition to a medal, the US Olympic Committee also awards a cash prize:
- $25,000 to gold medal winners
- $15,000 for silver
- $10,000 for Bronze
For a Michael Phelps or Ryan Lochte who sign million-dollar endorsement deals, this isn’t much. But to the average amateur shot-put thrower, this is a nice chunk of money.
In addition to the cash prizes, new property must also be included as income using its fair market value as measure.
"This fair market value rule famously became an issue when an IRS spokesperson declared whoever caught the Mark McGwire’s record breaking 62nd Home Run ball would owe hundreds of thousands in taxes… even if they gave the ball back to McGwire!" continues Mr. Samms.
However, in the McGwire case, the IRS backed down. Will the IRS attempt to collect taxes and go after American Hero Olympic Athletes?
" Well, according to the law, gold medals are taxable," says Mr. Samms. "But experts believe the IRS would rather skip the outrage than come after an Olympian who doesn’t include their winnings on their taxes."
To read more information about this story, please visit http://elevationgroupexposed.com/olympic-gold-and-the-irs/