Don't Mess With Taxes

U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.

Cheek captured the gold in the 500-meter speedskating event. Then he announced that he's donating the $25,000 he will get from the U.S. Olympic Committee for the win to Right to Play, a group that uses sports to help needy children worldwide.

If he winds more medals, that money also will go to the organization.

Right to Play is supported by Cheek's childhood hero, Norwegian speedskater Johann Olav Koss. It was while watching Koss compete that a young Cheek decided he wanted to master the same sport.

Cheek has specified that his donation go to help children of the Darfur region in Sudan. He also encouraged the games' corporate sponsors to match his contribution. (No word yet on any takers.)

You can read more about Joey's Olympic and giving spirit in this Washington Post story.

In the wake of Cheek's winnings and generosity, the folks at TaxProf got to wondering whether the IRS would get involved. The law professor blog notes:

"Every two years, a topic of conversation among tax folks is the tax treatment of Olympic athletes. One issue is whether the medals themselves constitute income -- a tantalizing line is found in Commissioner v. Wills, 411 F.2d 537 (9th Cir. 1969), requiring Maury Wills to report as income the value of the Hickok Belt he received for being named athlete of the year."

But what about Cheek's reduction of his Olympic income through the charitable gift of all his winnings? Will it meet the IRS philanthropic parameters and pass tax donation muster?

Depending upon the type of charity you give to, you generally can't deduct donation amounts that are greater than 50 percent of your adjusted gross income (and in some cases the limit is 30 or 20 percent). When you give more than the limit, you have to carry forward your excess contributions to deduct in future tax years.

Even though the IRS is facing a mighty tax gap, the agency's image certainly would take another hit if it slaps this young man's wrist over his simple act of random kindness.

Of course, the law is the law. And while I'm sure that the tax deduction is the last thing on Cheek's mind, it sure would be nice if he got some kind of remuneration out of his success on the skating track.

Perhaps a member of Congress (any of the North Carolina delegation, since that's from where Joey hails) might want to consider some specific legislation providing for special tax treatment of athletes in international competitions who opt to forgo their winnings in the name of charity.

Tax laws get tweaked for special circumstances all the time. In fact, the charitable donation rules were changed for this tax season to accommodate the outpouring of aide in the wake of Hurricane Katrina. You can read more about those changes and charitable donation tax laws in general here.

A scrambled mess: The other big news this week was, of course, the vice president's shooting mishap, a perfect of example of going from the sublime generosity of a young athlete to the surreal actions of an aging sportsman.

The good news: Harry Whittington is out of the hospital. As he headed home, he told reporters, he was "lucky." No shotgun pellets, Sherlock! More comments from Harry in this Bloomberg report.

If you want to read the official shooting report, FindLaw has it posted here.

The Corpus Christi Caller-Times, which first reported Whittington's shooting, now has a re-enactment (using a paper target) of the event. Watch the shooting simulation here.

The better news: When a politician shoots himself in the foot -- or a hunting companion in the face -- the jokes just keep on hatching.

In addition to the late-night talk show jabs, there are various hilarious/tasteless (you choose, depending upon your political party affiliation) Internet postings, parodies and cartoons about the incident.

A couple of note: Deadeye Dick's Gun Club and Dick Cheney quail hunt game. About.com has a complete run-down here.

And finally, from the truth-is-stranger-than-fiction category, comes this report out of Wisconsin.

It seems that the GOP love of bird hunting continues, unfazed by Cheney's poor aim. The Madison Capital Times reports that despite Cheney's hunting accident, Republican gubernatorial candidate Scott Walker will go ahead with a $500-per-person pheasant hunt fundraiser on Saturday.

"I just can't cancel an event that's had invitations out for three weeks,"  Walker's campaign manager Bruce Pfaff told the paper. "I need money in the bank, no matter whether I do it this weekend or a month from now."

Plus, the Washington Post reports here that Pfaff told another Wisconsin paper that the fundraising organizers aren't too worried because, "I don't think the vice president will be in Wisconsin that day."