Thursday, December 1, 2016

Taxing Operation Gold

Many thanks to Haskell Murray and the Business Law Prof Blog editorial crew for inviting me to serve as a guest blogger during the final countdown to 2017.  For the next few weeks, I’d like to share some of my research in the areas of amateur sports and tax.

Like many, I am an avid enthusiast of the Olympics.  During the 2012 Summer Games in London which highlighted extraordinary athletic prowess from the likes of Michael Phelps, Usain Bolt, and the all-impressive gold medal beach volleyball duo Ross and Kessy, Marco Rubio introduced Bill S.3471 (The Olympic Tax Elimination Act (OTEA)) which proposed to exclude from U.S. Olympic athletes’ gross income the value of any prizes or awards won during the Games.  

This bill piqued my interest in exploring the tax issues facing U.S. Olympic medal-winning athletes.  In 2013, my Central Michigan sports law colleague Adam Epstein and I published Taxing Missy: Operation Gold and the 2012 Proposed Olympic Tax Elimination Act, which explores general tax issues within sports, investigates the U.S. Olympic Committee’s (USOC) Operation Gold program (awarding $25K for gold, $15K for silver, and $10K for bronze medals won at the Olympics by U.S. athletes), analyzes the purpose of the OTEA, and proposes ways to reduce or eliminate federal income tax on athletes’ Operation Gold earnings.

Fast forward to 2016 – this past October President Obama signed into law the Appreciation for Olympians and Paralympians Act of 2016 that exempts from Olympic and Paralympic athletes’ income the value of medals awarded and prize money received from the USOC.  While this exclusion won’t benefit the likes of Phelps, whose adjusted gross incomes exceeds $1 million, or Joseph Schooling who trains in the U.S. but represented Singapore in 2016 when he won gold in the 100 Fly (resulting in a $1M Singapore dollar cash prize), it’s a definitely a big WIN for most of the U.S.’ top athletes.

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