House votes to eliminate Olympic medal tax

The House on Thursday passed several bills relating to taxes and the IRS, including a measure that would make many Olympians’ medals and prize money tax-exempt.

{mosads}The Olympics bill, which passed by a vote of 415-1, would eliminate federal taxes on the value of Olympians’ and Paralympians’ medals, as well as prize money provided by the U.S. Olympic Committee. The only no vote was Rep. Jim Himes (D-Conn.)

Rep. Bob Dold (R-Ill.), who sponsored the bill, said on the House floor earlier this week that lawmakers should support the bill to show “our appreciation for the hard work and dedication of our Olympians and Paralympians.”

When the House Ways and Means Committee approved the bill last week, lawmakers amended it so the tax exemption would not apply to people with income of more than $1 million.

Rep. Bill Pascrell (D-N.J.), who had offered the amendment, said “this legislation honors our Olympic athletes while making sure our highest-paid professional sports stars continue to pay their fair share.”

The Senate approved a version of the bill without the provision about millionaires in July, so the chamber will need to pass the House version before the measure is sent to President Obama’s desk.

The House also unanimously passed a bipartisan bill that would prevent the IRS from wrongly seizing small-business owners’ assets.

The bill, sponsored by Reps. Peter Roskam (R-Ill.) and Joseph Crowley (D-N.Y.), would codify a policy that the IRS has had in place since October 2014 about when the agency seizes funds in cases where it suspects taxpayers of “structuring” transactions under $10,000 to avoid reporting requirements.

Under the bill, the IRS would only be allowed to seize funds in structuring cases if the funds came from illegal sources or transactions were structured to hide another crime.

Additionally, the bill would establish post-seizure review procedures in cases where funds were seized due to suspected structuring.

The legislation was introduced after the Ways and Means Committee’s oversight panel investigated the IRS’ handling of small-business owners’ seized funds.

Prior to 2014, the agency would seize assets in suspected structuring cases even when the funds came from legal sources. It took some small-business owners years to get their money back, and others still have not had their funds returned.

In June, the IRS announced it was taking new steps to review cases in which the agency seized funds.

Roskam said the House took a step in “righting a significant wrong.”

Crowley the legislation “will codify into law much needed reforms to the process to stop abusive asset forfeitures.”

The bill was named after several of the victims of the IRS’s old policy, who were pleased to see the measure pass.

“It’s been a long time coming,” said Randy Sowers, a Maryland farmer who didn’t get all of his money back until recently.

Sens. Tim Scott (R-S.C.) and Sherrod Brown (D-Ohio) on Tuesday introduced a companion bill in the Senate. Roskam said he thinks the Senate should be able to easily pass the measure.

Another bill that the House approved Thursday would allow certain employees to defer taxes on stock options. The bill passed by a vote of 287-124.

Supporters of the bill, sponsored by Rep. Erik Paulsen (R-Minn.), argue that the bill would help startups attract employees. But the Obama administration and some Democrats opposed the bill because its cost, $1 billion over 10 years, is not offset.

The House also passed a couple of tax bills on Wednesday. One would give tax incentives to citrus growers who need to replace trees that have been affected by disease but cannot afford to do so on their own. Another would streamline the rules for when employees who travel for work have to pay nonresident income taxes to another state.