Just cranking out my 2003 Taxes, and I wondered if any winnings in my name were being reported to the IRS?
Didn't really keep all my reciepts or anything...
Does anyone out there actually claim golf income?
I NEVER have...and I always wonder if a big fat AUDIT is headed my way someday :confused:

If you win more than $600 in an event (like Worlds?), the TDs are supposed to withhold money and report it to the IRS. So, the IRS will know you earned that money and how much. If you track your expenses, you could get some of that money back as a refund. But not claiming any winnings at all could be more of a problem even if you are due a refund.

It has happened................ :(

Not to me of course, but there are those who you SHOULD talk to....Start with Scott Stokley :eek:

If you forgot which ones you won over $600, check your results online here. You can see how much you earned and where, without needing your receipts. Just another fine service from your PDGA: helping the big and little winners track their earnings for tax purposes :)

Actually the TD wouldn't withhold anything. They WOULD get your Social Security Number and issue you a Form 1099 at the end of the year and report the same to the IRS. :o

It's up to you to deal with the tax liability. It's just like being a consultant or contractor or winning money in a casino. But you would also get to claim reasonable expenses toward those winnings.

Maybe one of our CPA members can chime in on this one.

Speaking personally, not for the Board.

Jon, just curious. Where does the TD get your SS# from? and if they report it to the IRS, don't they also have to report it to DTL by Feb 1. In other words, if DTL has not received a 1099 for a $600+ win, then can't he assume the IRS does not know of that particular one either?

A related aside. As a regular at the track, you always provide the tax info and sign for it before you get paid. I would have thought DG was the same, but apparently, either TDs don't follow the tax rules or they are allowed to report at the end of the year.

Mike, I've filed all of the 1099's that tournaments have sent me. Some TD's don't send them out til the last minute, which is wrong. Just make sure you get them before you file.

Walt

It's too late for me. I've already got my refund back and spent it.

I have brought this up before, TD's need to make sure they file 1099's for any win over $599.

While you may not get caught for a while, it will eventually catch up with you, and thoise azzwipes dont play around, come audit time.

Former tax lawyer chiming in:

The TD would get the tax information from the player at the tournament on the current form provided for this purpose by the IRS. I've filled out that form as an independant contractor consultant. The TD could recreate the form from the registration card except for the social security number.

To my knowlege, most TDs are not tax compliant. Except for the really big tournaments, most disc golf money moves in the black market. If we ever get big money in the sport, this will be a big issue.

An independant contractor's obligation to report his winnings is independant of the TD's obligation to report his payouts. It is no defense that you did not receive a 1099 if you get audited.

Whether you can report and deduct your expenses would depend on whether the IRS regards your activities as professional sports prizes or gambling winnings. Based upon what I've seen when I've researched the issue in the past, non-touring pros who live off some kind of regular employment and play weekend tournaments for fun and small cash should report their income as gambling winnings and their entry fees as gambling losses. Touring pros can probably report their prize money as ordinary income on a schedule C and deduct their entry fees as business expenses.
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Disclaimer: Don't take legal or tax advice from some stranger on internet. You get what you pay for. You paid me nothing. I'm a lawyer but I'm not your lawyer.

TD's are required to send 1099's by January 31st. Those related to the USDGC were sent last Thursday.

Not reporting income from a 1099 will almost certainly be caught by the IRS' matching program. This may not trigger a full-fledged audit, but it will generate a letter from them.

Players can offset expenses against winnings. Allowable expenses would include more than than entry fees. Most players could not generate an allowable loss since their disc golfing would be considered either gambling or a hobby by the IRS. Some players may be able to generate allowable losses in the right circumstances. Keep in mind that all winnings should be included in income, not just those submitted on 1099's.

We will leave the state tax consequences for another post. Believe it or not, the South Carolina Department of Revenue is far more agressive than the IRS.

As Bruce said, don't take advice from a stranger on the Internet. I am a CPA, but I am not your CPA.

Take care,

Harold

Great, we are all going to prison! :)

So it's up to me to report my winnings, regardless of wether or not the TD sent me a 1099?
Has ANYONE recieved a 1099 from a TD this year? :confused:

Great, we are all going to prison! :)




not all of us....some haven't won enough for the irs to know we play the sport :(

I have always claimed my winnings(the few dollars that is) and deducted my expenses. My CPA has given me the advice to win more or expense less. Every year it seems my expenses are greater than my winnings and that red flags the deductions as an unreasonable business practice. I have not been audited (crossing all appendages), but I'm with Brad, I'm too frek'n old to go to prison....I just hope that when the day comes to face the tax man he is reasonable enough to see our sport as a professional business, not gambling, :cool:or a weekend hobby.

Mike, only the USDGC.

Walt

but I'm with Brad, I'm too frek'n old to go to prison....I just hope that when the day comes to face the tax man he is reasonable enough to see our sport as a professional business, not gambling, :cool:or a weekend hobby.



Man, I hope they send us to Tax Evasion prison where the incarceration cells are plush, and there is a disc golf course on the grounds. Tennis courts, bocce, swimming pools, hot swedish female masseuses...

Who would get in trouble by the IRS? The TD who didn't issue the 1099 or the player who didn't claim it as income because they didn't receive their 1099? Or both? Just wondering....

since we've heard from a tax lawyer and a CPA, i thought i would throw in my .02 as an Enrolled Agent and since the tax lawyer and CPA are most likely the only two people here that have ever heard of an Enrolled Agent i'll add that i'm enrolled to practice before the IRS. basically, i am the guy that people contact when their "tax preparer" didn't do them enough favors and the IRS or state gov't contact them about issues on the return.

so, here is my take as an enrolled agent and as an avid disc golfer.

it is your responsibility to claim income. forget about the TD's, postal workers et al and take responsibility for your own income.

that is not meant to sound as if i encourage each of you to pay more tax, in fact it is the opposite. i would hope that each of you that are fortunate enough to travel and cash are
smart enough to realize that if you have the INTENT to make a profit, you are a Sch C filer. the IRS is more concerned with your intent than they are with the numbers on the return.

if you are a travelling pro, i don't care if you have a side job flipping burgers that makes half of your total income for the year, if you are a travelling pro you have an intent to make a profit. that being the case, all expenses that lead towards the income you receive as a travelling pro are deductible even if they generate a net loss for you during the year.

i am not saying that as someone who thinks it should be this way or that, i am saying that as someone that DEFENDS tax returns directly to internal revenue agents and i would defend a travelling pro's rights to his or her income or losses.

forget about ever including disc golf winnings as gambling income, not only are you not gambling according to the IRS (gambling is gambling because it is devoid of skill, while that may be the case after smacking a tree, it is not the case when you pay a fee to enter a tournament with the intent of cashing. DO NOT REPORT THIS MONEY AS GAMBLING INCOME. any expense you have to earn that money playing disc golf would then be subject to the 2% of AGI test and that is not only not fair it is downright wrong.

disc golf earnings should be classified as either;

hobby - you are not a travelling pro but someone who made it
to a tourney and was fortunate enough to win some
beer money. YOUR LOSSES ARE DEDUCTIBLE UP
TO YOUR GAINS. ( if you won a hundred bucks but
had 150 worth of entry fees, gas and disc costs you
would only be able to offset your 100 winnings with
100 in losses.

Sch C- you are the touring pro, you receive disc sponsorships etc, travel to each event, put money on the line with
the intent to make money in exchange for your SKILL.
each disc you bought, your golf bag, your miles driven to and
from the event or plane ticket if applies, your hotel room etc
are all deductible against your disc income and should be
aggressively deducted because they are legal interpretations
of the tax code. there isn't enough money in DG yet to be wasting these important items of income and expense.

if you are a travelling pro and you have more expense than income from DG, you will have a net loss Sch C that will carry
over to your 1040 and make fewer of your "real life job" dollars taxable.

this is coming from someone that would fight for each dollar on a return, whether it is for a woman that raises and sells cats, to evangelists and professional bowlers , builders, and disc golfers. i have prepared thousands and thousands of tax returns for all of the above and more and spent many hours dealing with the IRS on a face to face basis.

if they scare you, that's fine, but they don't scare me and my clients have at least an extra nickel every year to show for it.

Since it's tax time again, and this question was asked in the other thread, I figured I'd answer it again for this year. Avg Joe is exactly right for both types of players (touring/"weekend" pros). Schedule C for business income and expenses should be used for touring pros, and hobby income/expenses should be used for weekend pros. He left out that sponsorships should be included as income. I'm studying the current tax law right now for the CPA Exam, so I thought I'd share it with those who don't care to shell out $600 for the textbooks or tax advice.

For amateurs, I am pretty sure it would work the same as weekend pros, but virtually no ams would win more than $600 of merchandise in a season, let alone a single event. But since you can only claim losses up to winnings, there's no advantage to claiming unnecessary (insignificant) income.

One thing I'm surprised that was left out was the Ace Pot. My take on the tax law is that it is just like winning the lottery or Plinko. You should report it as gambling winnings, and deduct all ace pot entry fees throughout the year. I don't know if you could net the tourney entries or not (my guess is not), but for huge ace pots (> $1,000), I'd report it since it is technically gambling winnings.

Disclaimer: I am not yet a CPA, so I'm definitely not your CPA!

keep it up and learn that stuff.

My brother-in-law was a CPA for Deloit and Tushe (whatever) and gave it up for the church. He is being ordained Sunday the 17th at Valley Ranch Babtist Church.

Thx


You mean Toilet and ******?!?
That's what they're known as in the profession! Although they are a great firm, it's just funny that it fits.

Jon, just curious. Where does the TD get your SS# from? and if they report it to the IRS, don't they also have to report it to DTL by Feb 1. In other words, if DTL has not received a 1099 for a $600+ win, then can't he assume the IRS does not know of that particular one either?



James,

The USDGC and pro World's registration forms require a SS# and a signature.

yea, thats the one.

I had a customer come in with one of there T-shirts one time. So i asked them if they ever worked with my brother-in-law. He actually had and worked with him quite a bit.

He did not quit because he didn't like it, he quit because he always wanted to serve the church. He already was working with the church on a part time bases (cutting his hours back for D&T) But when they asked him if he wanted to work for the church full time, he really didn't even think about it.

That is the 2nd CPA that I know to quit and work for a church. My CPA's assistant got his CPA and was still working for him. Instead of leaving to open his own place or working for a larger company, he quit to move to Boulder CO to be a youth minister.

You as the payer are supposed to get a signed W-9, which is an affidavit certifying that your SSN is correct, from the payee prior to paying out $600 or more. The info for the 1099 comes from the W-9.

The hard part is that the $600 limit is not a "per payment" limit, by a limit for the year from a single payer to a single payee. So if you run the payout through your club's books for an entire year long series, you are supposed to issue 1099s for anyone who recieved $600 or more for the year. $50 here, $150 there, another $300 along the line and you are almost there.

Someone will chime in if I'm wrong, but when I was trying to get SoCal up to snuff legal-wise, that is what my research led me to believe.