http://news.yahoo.com/s/ap/20071019/ap_on_go_ot/irs_poker
Winners of cash prizes in poker and chess are already supposed to report those awards on their income taxes, but now the IRS is requiring big poker tournaments to report all prizes awarded over $5000. Does this apply to chess? Obviously, not many tournaments have prizes that big, but it seems like it should apply the same way, shouldn’t it?
–Fromper
The USCF tracks winnings for all players who receive prize checks in national events run by the USCF office specifically because of IRS regulations. Currently if someone earns $600 or more in prizes during the year, we issue them a 1099, even if those winnings are spread over multiple national events.
USCF affiliates should probably be doing the same thing. (Each organizer would be considered a separate payor for IRS reporting purposes, so someone who wins more than $600 but not all from the same organizer is on his/her own as far as reporting those winnings to the IRS.)
There are additional rules regarding foreign nationals or those who cannot provide their social security number that organizers should be aware of.