(ATR.ORG) — As 230 U.S. Olympic athletes gear up to compete in the 2014 Winter Games, the only thing colder than the slopes at Sochi is the fact that any prizes awarded by the U.S. Olympic Commission (USOC) will be taxed by the IRS. Many Americans don't realize that the U.S. taxes income earned abroad, and as such even the winnings of Olympic athletes are subject to the reach of the IRS.
The USOC awards prizes to U.S. Olympic medal winners: $25,000 for gold, $15,000 for silver, and $10,000 for bronze. Relative to each athlete's income tax bracket, some top earners such as Shaun White could end up paying over a third (39.6 percent) of their winnings to the IRS.
Additionally, because the U.S. is one of only a handful of developed countries that tax income earned abroad, it is likely America's competitors will not be subject to such a tax. Taken together - the tax on Olympic athletes and the tax on income earned abroad - it can be said the U.S. has officially "earned the Gold" for having one of the most backwards and illogical tax codes in the world.
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