Olympic Winnings Raided By IRS
Legislation Would Make Olympic Winnings Tax Free
The 2012 Olympics have just ended, but not the tax bills for American athletes that brought a medal across the pond.
Winning Olympic gold, silver or bronze is no easy task. An enduring fete, the personal reward can last a lifetime.
But the medals come with some cash, too: $25,000 for gold, $15,000 for silver and $10,000 for bronze. It’s one of the U.S. Olympic Committee’s ways of saying ‘congratulations.’
So while the 2012 Olympics were in full swing, Washington politicians bent over backward to do some Olympic legislating of their own.
Legislation was introduced to make Olympic winnings tax free and exempt from the long arms of the Internal Revenue Service. A savvy move during the heat of the 2012 election season, to say the least.
But Olympic medalists can’t backflip their way out of the IRS’s collection actions if they owe back taxes due to endorsement deals or other revenue borne from Olympic success.
Anti-tax activists claimed that Olympic medalists could end up paying nearly $9,000 for winning a gold medal, up to $5,385 for silver, and $3,502 for bronze. But PolitiFact, a journalism fact-checking operation, rated those numbers “mostly false” due to an athlete’s ability to deduct unreimbursed expenses on their tax returns.
Whether Washington passes the legislation remains to be seen, but there’s no legislation dissolving back tax debt owed to the IRS.
Working with a tax professional can help you become current with your IRS tax debts and prevent penalties and interest from becoming an Olympic-sized blunder. And with the help of a tax attorney, you can avoid a possible wage garnishment or bank levy, and win your own gold medal for financial freedom.