IRS to Tax Olympic Medal Winners

 IRS

The IRS expects winning Olympians representing the U.S. to pay taxes on their medals and the cash Congressional awards granted to them. When the U.S. Olympic team departed Russia, they left with nine gold, seven silver, and 12 bronze medals for a total of 28.

Upon their return to America, the U.S. Olympic commission will award the winning athletes cash prizes. Gold earns $25,000, silver $15,000, and bronze $10,000. The IRS considers the Congressional awards as well as the metallic value found in the Olympian’s medal as taxable income.

Pending on what the athlete reports for his or her total income at the end of the year, a gold medal winner could pay up to $9,900 in taxes, a silver medalist $5,940, and $3,960 could be paid by a bronze winner. Even if an athlete refuses all endorsements and falls into the lowest tax bracket, the taxable income for a gold medal falls to $2,500, $1,500 for silver, and $1,000 for the bronze.

To the IRS, Olympic medal winners are no different from any other taxpayer. The American tax code allows the organization to collect on a filer’s global earnings. The U.S. is one of the few countries imposing such a regulation. For the IRS, filers must pay taxes. The primary purpose of the IRS is to collect revenue owed to the Treasury.

Senator John Thune (R-SD) wants to exempt American Olympians from paying taxes on their Congressional cash prizes and medals. He sits on the Committee on Commerce, Science, and Transportation. He also oversees the United States Olympic Committee and other sports organizations addressing tax and revenue. The senator has proposed exempting Olympic and Paralympics medalists from IRS taxation with Senate bill 2026. Most countries welcome home their teams with celebrations. The United States does the same, but medalists also pay an IRS bill that the senator finds unfair.

Starting with the 2014 games, Senator Thune’s legislation would exempt the value of the medals won and the income distributed to the winners as being taxable by the IRS. The senator believes the bill would have a negligible effect on revenue and would not affect taxation on endorsements and sponsorship awaiting the victorious athletes. The bill has bipartisan support from Senators Marco Rubio (R-Fla.) and Chuck Schumer (D-N.Y.) along with other Republican and Democrat members of the senate.

In 2012, Senator Rubio proposed a similar bill that never advanced in the Senate. For Rubio, the tax code imposed on Olympic medalist must end. Athletes representing the U.S. should not have to worry about the IRS after representing their country.

The White House supports Thune’s legislation. President Obama wants to honor Olympic athletes who volunteered their time and trained for America. He has supported a tax exemption for medalists since 2012. White House press secretary Jay Carney stated in 2012 that if passed by Congress, the President would support such legislation.

Senate Majority Leader Harry Reid has yet to signal his willingness to support, yet alone address Senator Thune’s bill. Without Senator Reid’s support the bill cannot be brought to the Senate floor yet alone debated. Should nothing happen, the IRS will expect Olympic medal winners to pay their taxes.

By Brian T. Yates

Sources:
Fox News
Senator Thune
AL.com
The Hill

Leave a Reply

Your email address will not be published.