Bill stops IRS from taxing Olympic medals
WASHINGTON – Federal legislators in the Senate are pushing a bipartisan bill that would block the IRS from taxing Olympic medalists – something many are calling a “victory tax” on athletes.
To date, the 554-member Team USA has roped in 69 medals at the games in Rio, beating out Great Britain’s second place medal count by more than 30. But currently, those athletes are subject to taxation when they bring their earnings back to the States. Michael Phelps for example, whose five gold and one silver, could be handed a tax bill of more than $55,000.
Olympic athletes who earn medals also receive a cash award paid for by the United State Olympic Committee: $25,000 for gold; $15,000 for silver; and $10,000 for bronze. However, because that money is considered “earned income abroad,” it’s also subject to federal taxation.
According to the nonprofit taxpayer advocacy group Americans for Tax Reform, a medalist from Team USA could end up facing a tax bill of $9,900 per gold medal, $5,940 per silver medal, and $3,960 per bronze medal based on the maximum possible tax rates.
In March, South Dakota Senator John Thune (D) introduced a bill to protect medalists from being beat by the IRS. The bill passed the Senate unanimously in July and is awaiting a vote in the House of Representatives, where an identical bill, called the TEAM Act, was introduced in 2015. Similar legislation was also proposed for the 2012 Olympic games but died in the House.
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