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Why Congress is Proposing a 100% Tax on Certain U.S. Athletes

It sounds like an exaggeration, but it has become a very real legislative proposal: an American athlete wins a medal, and the federal government takes every penny of their earnings.

A newly introduced federal bill targeting the 2026 games would levy a staggering 100% excise tax on certain income generated by U.S. citizens and permanent residents who choose to compete internationally for a specific list of foreign nations.

In short, some top-tier athletes could be forced to surrender their entire international athletic income.

Understanding the Proposed OLYMPICS Act

Dubbed the Officially Limiting Yearly Money Procured by Individuals Concerning Sportmanship (OLYMPICS) Act, this legislation proposes a 100% excise tax on income derived from:

  • International competition participation and appearance fees
  • Tournament prize money
  • Sponsorship and endorsement income explicitly tied to that national representation

Currently, the bill strictly targets athletes representing China, Russia, Iran, and North Korea. However, the legislative framework could eventually be expanded to encompass athletes competing for other nations during high-profile global events like the World Cup or the Olympics.

Tax policy concept

The Catalyst Behind the Legislation

This proposal did not emerge in a vacuum. It is a direct response to recent international sporting events. A prominent figure driving this legislative discussion is Eileen Gu, a U.S.-born freestyle skier who actively competes for China.

Gu represents a high-profile convergence of athletic success and massive financial compensation. Reports indicate that she:

A Common Practice in Global Sports

While Gu’s financial profile makes major headlines, athletes shifting national allegiance is a long-standing standard practice. Athletes frequently switch representation due to dual citizenship, family heritage, or simply to secure vital funding and a reliable spot on a competitive roster.

For example, elite golfer Rory McIlroy competes for Ireland globally despite playing primarily on the U.S.-based PGA Tour. In basketball, NBA stars like Joel Embiid have navigated complex multi-nation eligibility rules, while Luka Dončić proudly represents Slovenia. In track and field, Bernard Lagat famously ran for both Kenya and the United States during his esteemed career.

Small business tax planning

The Current Reality of U.S. Taxation

Even without the OLYMPICS Act, U.S. citizens and permanent residents are legally required to report and pay taxes on their worldwide income. Whether you are an elite athlete securing foreign sponsorships or a small business owner in Missouri expanding operations overseas, the IRS consistently expects its share.

As highlighted in one analysis, dual-national athletes frequently grapple with severe double taxation risks. At Steve Shapiro, EA CTRC, we routinely see the complicated IRS issues that arise when individuals fail to implement proactive cross-border tax planning for their international earnings. Proper structuring is vital.

Tax Policy as a Behavioral Tool

This proposal underscores a broader trend: governments heavily utilizing the tax code to engineer specific social or political behavior. From local "sin taxes" on tobacco to federal credits for renewable energy investments, taxation is rarely just about funding infrastructure.

The OLYMPICS Act pushes this boundary significantly, raising serious questions about utilizing the IRS as a geopolitical penalty mechanism. Enforcing such a law—tracking foreign sponsorships or navigating complex dual-citizenship treaties—would undoubtedly be a logistical nightmare.

What This Means for Taxpayers in Saint Charles

While a 100% tax on Olympic medals likely will not impact your daily financial life, the core lesson remains highly relevant. In our deeply interconnected global economy, the IRS follows your income wherever it travels. If you have international investments, foreign business dealings, or complex dual-citizenship obligations, reliable tax resolution solutions are essential to avoid severe penalties.

Backed by 40 years of financial expertise, insurance licensing, and extensive credit and collections experience, our practice offers the well-rounded skillset needed to protect your assets. Whether you need an IRS issue resolved or year-round tax preparation, contact Steve Shapiro, EA CTRC in Saint Charles, MO, today to schedule a comprehensive consultation.

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