Congress Prevents Taxation Of Olympic Athletes
I can understand the arguments in favor of taxing America’s Olympic athletes. After all, we are talking about men and women who are highly rewarded for their endeavors through such things as sponsorship and product endorsements, aren’t we? Why should they get a tax break? Few other Americans, taxed as they are on their worldwide earnings, would. And anyway, isn’t the Olympics about the joy of participation in sport, rather than the money you get for participating?
Well, actually, no, not really. Aside from the fact that the amateur ethos that embodied the Olympic spirit has long since departed down the track, it’s a generalization, to say the least, to assume that every single member of the 558-string Team USA at the Rio Olympics is rolling in cash.
Yes, one would expect the higher end of the Olympic pay league table to be dominated by a small band of basketball players, golfers, tennis stars, and soccer players. But somehow I doubt whether archery, synchronized swimming, table tennis, Greco-Roman wrestling, and any other of the more obscure sports you care to mention are lucrative activities. But participants in the less glamorous sports no doubt work just as hard to try and get onto the podium.
But this issue goes beyond one of merely the taxation of prize money and earnings. Did you know that the US Internal Revenue Service actually taxes the medals that athletes win too? Given that a gold medal isn’t actually worth its weight in gold (because underneath it’s mostly silver), and that a bronze medal is an alloy of various metals and worth about five bucks, the actual amount of tax due is small. There’s a principle at stake though, and it just feels quite mean on the IRS’s part to punish a lifetime’s dedication to becoming the ultimate in sporting success with a petty tax bill. Which is why I support new legislation, approved by Congress last week, to prevent the IRS from taxing Olympic medals as well as cash prizes awarded to Olympic athletes.
It’s nice to see that a sense of fair play still exists in some quarters.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look