What is the correct protocol if a player refuses to fill out a 1099 form consistently after tournaments ? Is there anyway to penalize a player for this who is consistently winning prize money ?
The CCA website says “If you have no US social security number, the organizer must withhold and send to the IRS 30% of your prize.” I don’t think they made that one up; that is undoubtedly law. I’m sure Bill Brock can confirm that.
Glenn Panner and myself had to do that when we ran an event in Atlantic City. The player involved was used to it. He claimed that there was a process where he could petition for that held back $$$ amount. There were a few other regulations, but it does exist.
A player filing a W-9 is required, and the organizer must withhold an amount without W-9. The organizer can also have the player fill out a W-8 if the player is foreign.
Caveman Chess requires a player fill out a W-9 if required (they’ve received more than $600 from Caveman Chess in a year) before payment will occur.
When we also do our filings, we can report to the IRS that Player X with address Y refused to fill out a W-9, in order to ensure that our own tax reporting is clear.
Players are much better off filling out required forms.
Additionally, there are many methods of electronic payment, including to players who dwell in a foreign country. Most common are Wise and Melio.
What happens if they player objects ? How do you resolve this and what happens if they try and appeal to uschess ? Uschess rules do not specify anything about 1099.
Rule 32C says:
Prizes advertised as guaranteed must be paid promptly and in full. Prize winners may be required to provide ID, social security numbers, tax forms information, etc. before prizes can be issued. Failure to pay guaranteed prizes may result in penalties, including revocation of affiliation or tournament director certification.
The rule is correct but what if you are dealing with a player who js arguing with you over the rule. This is all hypothetical of course. Would you then tell them to reach out to uschess ?
I’d figure that legal statute requirements override game rules. Any arguments in violation of legal requirements would run aground on rule 1A.
PS The player would have the ability to file a complaint with US Chess, pay the good faith fee, and then have the appropriate committees decide upon the complaint and on whether or not it was a reasonable one that would get the good faith fee refunded versus retained.
I would show them the rule, tell them I also have to follow federal (and possibly state) tax laws, and tell them that they have the right to appeal to the US Chess office but will likely get the same response from them, and might not get their filing fee back because the rule is pretty clear.
If I was running a tournament with a potential for prizes above the IRS limit (is it still $600?) I would also probably post this at the site.
Not all tournament directors do such a thing. Good responses. We live in a time of uncertainty and you never know how players might react to certain situations.
Is it the 1099 you’re asking them to fill out, or a W9? The 1099 would be something you complete as the organizer.
Yes, technically it is a W-9 form, the organizer will issue a 1099 at the end of the year, possibly aggregating payments over multiple tournaments during the year.
If they refuse the w9 you are required to withhold 30% under IRS rules.
Maybe a trick question. Can uschess intervene if a tournament director is running multiple prize money tournaments that require the W9 at the end of the year but are not filing them ? I know of a lot of tournament directors who run cash prize events and some players exceed the $600 but are not filling out the W9.
That’s probably a question for the ED and legal counsel. US Chess may not have any direct involvement in an issue between the IRS, the affiliate and the player(s) involved, but would have to respond appropriately to legal action.
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Is the question is US Chess going to insist a TD break the law. I doubt it. Is US Chess going to take action to force a TD to follow IRS rules. I doubt it.
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Seeing as US Chess does not get copies of the tax forms affiliates send in, I don’t see how US Chess would know whether or not IRS rules were followed.
That said, tournament reports require listing players who won at least $600 in prizes, so if an affiliate did not report it to either US Chess or the IRS then there is some basis for US Chess to take action, though any action US Chess takes may pale to insignificance compared to what the IRS does.
That is incorrect, the only thing US Chess gets notified about is when a cash prize exceeds the money floor level for players as a class prize (eg, under 2000), which is still at $4000. (It got raised from $2000 to $4000 in 2016 because of the Millionaire Open but has not been lowered again since that event died.) Prizes paid to players in open events are not subject to money floors and money floors only go up to 2000, so US Chess does not know about prizes from open events or for events with a higher ratings ceiling than 2000, though it does know about advertised prizes for Masters in Grand Prix events and there have been instances where organizers were sanctioned for not paying out those prizes, based upon a complaint from players, presumably.
Proposals to have TDs report all prizes paid, cash or non-cash, have historically been opposed by both TDs and players. As far as I know, there are no plans to change that in the Leago system, though I think there may still be an updated upload format that includes tiebreak information so we can order the event in the same order as the standings used by the event. (Not sure that will work if there are inconsistent results for ratings purposes in the event, such as both players getting a win, because that would likely mess up the point standings as used for prize purposes.)
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Make it is time for a change and TDs should report all prizes. Just food for thought
“Make it is time for a change and TDs should report all prizes. Just food for thought”
That can take a long time for little gain. Would you be looking at having US Chess generate those 1099s on behalf of the affiliates? Even though US Chess wouldn’t have any actual proof of payments?
What other gain would there be to justify the time for all the tied-for checks that end up less than $50 each (some years back I received some checks for less than $20 each).