APA sending out 1099 to players?

[RBC]

Just to clarify, the only APA payout that includes merchandise is the national singles event in April, which is actually more than half cash. At the August event itself, over a million dollars is awarded, all money.

All I'm doing here is clarifying. I don't know what APA paid for "$350" cues or "$100" jackets in the singles program, nor does anyone else here, just like almost nobody here knows what CSI paid for the "$250" cues they gave away. To draw a conclusion (or even speculate) about inflated payouts based on partial information would be irresponsible, so I will refrain from doing so.

APA Operator

I don't think the question is really about "Market Value", not actual cost.

My original post was focused on the whole 1099 issue, and not on the declared "Market Value" of the items.

By the way, business owner to business owner, I urge you to consider using your name in your posts. From what I've seen of your posts, you deserve the credit!

 

[whitewolf]

How to dispute your incorrect form 1099.

http://contests.about.com/od/taxesfinances/ht/FMVvsARV.htm

Also:


Disputing the Value of a Prize (or Don’t Pay the IRS More than the Prize is Worth!)




Having just done my taxes, and having dealt with a series of 1099s (alas, no prize income this year), I thought I’d resurrect this post from 2005 on how to dispute the value of a prize as reported to you on a 1099.

If you win a stereo, the provider of the prize says it’s worth $2000 but you can find it in a store for $750, what do you do?

Very important not to pay tax on that $2000 — you might wind up sending as much to the IRS as it would have cost to just buy the item in the first place!


Though not to be confused with tax advice, here’s my understanding of it from personal experience:

First, you should attempt to negotiate with whomever provides the prize. The official way to do it (since in most cases you won’t be successful just asking for an adjustment) is to call the IRS at (800) 829-1040. It’s best to do so early in the morning in my experience, since you’ll have a better chance of getting through.

Explain that you received the 1099 and disagree with the amount that was reported on it, and that you’ve tried to resolve the situation but have been unable to.

Tell them that you were advised to have the IRS complete a Form 4598, “Form W-2 or 1099 Not Received or Incorrect.” It’s not something you can just download from their website.

You’ll need to give the IRS the payer information from the 1099 you received and the details of how you arrived at your own valuation figures.

The IRS will send the complaint form to the payer, who has 10 days to respond (you should receive a copy as well). Hopefully the payer will simply send a corrected 1099.

If you don’t receive a satisfactory response by the due date of your return, you have two options.

One is to include the amount that you believe to be correct on your return and attach the Form 4598 and an explanation. The IRS may later send you a notice of the discrepancy, so keep your records in good shape.

The other option is just to enter an adjustment as a negative amount. (You can even do that without going through the process of seeking to adjust with 1099, but your case may be more strongly documented if you’ve taken that step.)

If you received a Form 1099-MISC that shows $1,000 in box 3 for a prize yon won in a contest, but you know that a local store has the same item available for $750, you argue that the fair market value is $750. You can enter the $250 difference as a negative adjustment under Other Miscellaneous Income. One of the popular tax software packages advises that you enter “PRIZE FMV ADJUSTMENT” for the description and “-250″ for the amount.

No matter what course of action you pursue, you’ll want to document your adjustments, such as with ad clippings. If the prize was miles, and the fair market value was listed at a cost per mile greater than what the airline charges, simple printouts of the ‘purchase miles’ web pages should do the trick.

 

[RBC]

I did sign and give my SSN....I was not aware that I was going to be getting a 1099 for the cue or jacket. If so,I would have refused both. I can speak for (6) that went last year. NONE of us were aware of this. They couldn't have taxed me on something I refused but I wasn't given an option. I have not found any that agree with how that APA handled this with the prizes,etc


Are you seriously trying to tell me that the APA does not benefit with all of the 1099's issued for 2011??

AcuraHeel

I hope I didn't offend you, that was not my intention. Please accept my apology.

I'm pretty sure the documents you signed stated covered this whole issue. I'm with you in that I don't always read all the fine print before I sign, but just because I didn't read it, doesn't mean it isn't there. Now, whether or not they told you verbally, I certainly don't know. But that's what the signed document is for. For the last several years, I've had a booth at the APA Nationals, and signed a contract to do so. I've read them, and found them to be good thorough contracts, so I would expect the same thoroughness in the document you signed.

As for the issue of 1099's, keep in mind that we pay taxes from profits. Only the costs of these items will affect profits. 1099's just report cumulative payouts over $600. They are not a P&L event. As watchez pointed out, I'm not an accountant, but that's the way I understand it with my business.

Thanks!

 

[whitewolf]

My final conclusion is that the APA inflates the value of these items to INFLATE the amount of prize money etc. given back to the players so that the APA looks better than the other leagues (its competition).

 

[RBC]

How to dispute your incorrect form 1099.

http://contests.about.com/od/taxesfinances/ht/FMVvsARV.htm

Also:


Disputing the Value of a Prize (or Don’t Pay the IRS More than the Prize is Worth!)




Having just done my taxes, and having dealt with a series of 1099s (alas, no prize income this year), I thought I’d resurrect this post from 2005 on how to dispute the value of a prize as reported to you on a 1099.

If you win a stereo, the provider of the prize says it’s worth $2000 but you can find it in a store for $750, what do you do?

Very important not to pay tax on that $2000 — you might wind up sending as much to the IRS as it would have cost to just buy the item in the first place!


Though not to be confused with tax advice, here’s my understanding of it from personal experience:

First, you should attempt to negotiate with whomever provides the prize. The official way to do it (since in most cases you won’t be successful just asking for an adjustment) is to call the IRS at (800) 829-1040. It’s best to do so early in the morning in my experience, since you’ll have a better chance of getting through.

Explain that you received the 1099 and disagree with the amount that was reported on it, and that you’ve tried to resolve the situation but have been unable to.

Tell them that you were advised to have the IRS complete a Form 4598, “Form W-2 or 1099 Not Received or Incorrect.” It’s not something you can just download from their website.

You’ll need to give the IRS the payer information from the 1099 you received and the details of how you arrived at your own valuation figures.

The IRS will send the complaint form to the payer, who has 10 days to respond (you should receive a copy as well). Hopefully the payer will simply send a corrected 1099.

If you don’t receive a satisfactory response by the due date of your return, you have two options.

One is to include the amount that you believe to be correct on your return and attach the Form 4598 and an explanation. The IRS may later send you a notice of the discrepancy, so keep your records in good shape.

The other option is just to enter an adjustment as a negative amount. (You can even do that without going through the process of seeking to adjust with 1099, but your case may be more strongly documented if you’ve taken that step.)

If you received a Form 1099-MISC that shows $1,000 in box 3 for a prize yon won in a contest, but you know that a local store has the same item available for $750, you argue that the fair market value is $750. You can enter the $250 difference as a negative adjustment under Other Miscellaneous Income. One of the popular tax software packages advises that you enter “PRIZE FMV ADJUSTMENT” for the description and “-250″ for the amount.

No matter what course of action you pursue, you’ll want to document your adjustments, such as with ad clippings. If the prize was miles, and the fair market value was listed at a cost per mile greater than what the airline charges, simple printouts of the ‘purchase miles’ web pages should do the trick.

Whitewolf

That's good information. I'd still want to ask my tax accountant to be sure though.

I think the issue here is that the items were special, and would not be available elsewhere. If you can't go buy that specific product in the open market, then you can't give a market value comparison. If the APA used the MSRP from the manufacturer, then they have their bases covered. If they inflated the MSRP, then they would be in trouble.

Time to go to work!

 

[APA Operator]

APA Operator

I don't think the question is really about "Market Value", not actual cost.

My original post was focused on the whole 1099 issue, and not on the declared "Market Value" of the items.

By the way, business owner to business owner, I urge you to consider using your name in your posts. From what I've seen of your posts, you deserve the credit!

Thanks, but I'm not really interested in credit. With all the APA bashers in this forum, the last thing I need is for my own message board or email account to be flooded with the same kind of BS that gets posted here. If someone needs to use my preference for privacy to drag me down or prop themselves up, I don't really care - that would be their problem, not mine.

For the most part, my posts here are intended to help people understand how things actually work. I believe that much of the negativity towards APA in this forum stems from a lack of understanding, and my hope is that those who are willing to try to understand will benefit from my posts. I know that not everyone here WANTS a better understanding and some are not willing to consider anything I post simply because of the first three letters in my user ID, but again, those people have their own reasons/issues/problems. My goal here is to increase the signal-to-noise ratio, and I think I've actually accomplished that to a small degree.

 

[ctyhntr]

I just got my trophy for my teaming winning 1st place in the summer 2011 league. AFAIK, we didn't win any cash, and no trip to Las Vegas. I think we have to play the tri-cup qualifier.

Will I get a 1099 for this trophy, if so what is the fair market value?

 

[APA LO]

Boy - is this interesting.

We also send 1099's to all of the players. And keep in mind this is an accumulated payout of $600 or more. This means adding all of the smaller amounts and if it exceeds $600, we much (by law) send out a 1099.

BTW - I do not actually do this so I don't have an intimate understanding , but I have a pretty good understanding.

Uwate is correct.
I think the main reason the APA is using these inflated prize amounts is to make their payout look BIGGER.

None of the CSI events do that. Our payouts are usually cash, however we did give away 100 cuesticks back in 2005 and they were listed at the manufacturer's list price ($250 each) even though we did not pay that much. (we got a discount because of the quantity).

We would NEVER inflate the value to the extent I am hearing.

Does this mean that the BCAPL actually gives out mroe than the APA. I would not be suprised!!

I know I should not say anything (because I am a competitor) but in all honestly, the facts seem to speak for themselves. The APA is a great business model, but it appears that they have a hard time being real accurate in their distribution of information.

I am not familiar enough to really understand where the APA gets a tax advantage for this manipulatioin. But I do understand where they get a PR reason. LOL

Mark Griffin, CEO
CSI - BCAPL - USAPL

You were right that you probably shouldn't have said anything, Mark. It's posts like this that derail any chance of you being recognized as anything remotely similar to an ambassador to billiards.

"I think" and "I am not familiar enough" and "I know I should not say anything" were three very good reasons for you to consider not saying anything at all.

You've presented nothing in relation to facts about APA in this thread, yet opened the door to make people wonder if they aren't being honest. It's a pretty poor attempt to prop up your own league by belittling others.

Is this really how you wish to present yourself to your current and prospective customers?

 

[edd]

I emailed our office today. They referred me to the St. Louis office. I was basically told that I signed a piece of paper that said anything above $599.00 is taxable. (That includes gifts and cash) I asked her to break down the $1,150 for me so I can understand it more.

$600 cash ** I had to pay my airfare,hotel with that money...so I basically broke even on that

$100 for Jacket ** ridiculous.. I could care less about the damn jacket

$350 for Outlaw Cue ** again ridiculous... I gave it away


** I asked her if I could have chosen not to accept the cue and jacket. She laughed and said "no one has ever declined the cue or jacket" My response was " I bet you... no one knew they were gonna be taxed on it" I assumed that I earned the cue for finishing 9th nationally in my bracket.

I play league (3) nights a week. I spend roughly $1,300-$1,500 a year in league dues,etc. I've always been told that our money went to trips,gifts,plaques,etc. I'm not trying to get out of paying my taxes. I fell like I'm being forced to pay for something that I didn't want.

They only report after $599 and they set the payouts for the brackets at $600. Go figure!!

I'll stick to just playing casually. Good luck with this. As has been recommended, itemize all of your related expenses. It should more than balance out the winnings.

 

[purpdrag]

You were right that you probably shouldn't have said anything, Mark. It's posts like this that derail any chance of you being recognized as anything remotely similar to an ambassador to billiards.

"I think" and "I am not familiar enough" and "I know I should not say anything" were three very good reasons for you to consider not saying anything at all.

You've presented nothing in relation to facts about APA in this thread, yet opened the door to make people wonder if they aren't being honest. It's a pretty poor attempt to prop up your own league by belittling others.

Is this really how you wish to present yourself to your current and prospective customers?

Mr. Griffin is already widely recognized as being a leading ambassador for billiards. APA league operators on the other hand, are not. Mr. Griffin is just stating his opinion as an individual. It's an opinion that many of us have, for good reason, as evidenced by this thread and many others.

If you are an APA league operator, as your screen name suggests, you should have some access to the facts about APA, but you have presented nothing in relation to the facts about APA either. The information I've read so far doesn't look good for the APA. Let me give you a recommendation to pass up the chain to the APA leadership if you want to start improving your reputation a little. STOP GIVING MERCHANDISE AS PRIZES! CASH ONLY! It's a lot harder to debate the value of cash and all these 1099 complaints would magically go away.

I don't believe they will ever do that because I do believe they are making money on it somehow. No, I do not believe they paid $350 for each of those cues and it would be very hard to convince me otherwise. Paying all prizes in cash in the future would be a great start though.

You're only digging a deeper hole by criticizing Mark Griffin, because he's shown time and again that he is more interested in improving the sport of pool and the situation for pool players than in lining his own pockets, and that is really hard to find.

 

[APA LO]

Mr. Griffin is already widely recognized as being a leading ambassador for billiards. APA league operators on the other hand, are not. Mr. Griffin is just stating his opinion as an individual. It's an opinion that many of us have, for good reason, as evidenced by this thread and many others.

If you are an APA league operator, as your screen name suggests, you should have some access to the facts about APA, but you have presented nothing in relation to the facts about APA either. The information I've read so far doesn't look good for the APA. Let me give you a recommendation to pass up the chain to the APA leadership if you want to start improving your reputation a little. STOP GIVING MERCHANDISE AS PRIZES! CASH ONLY! It's a lot harder to debate the value of cash and all these 1099 complaints would magically go away.

I don't believe they will ever do that because I do believe they are making money on it somehow. No, I do not believe they paid $350 for each of those cues and it would be very hard to convince me otherwise. Paying all prizes in cash in the future would be a great start though.

You're only digging a deeper hole by criticizing Mark Griffin, because he's shown time and again that he is more interested in improving the sport of pool and the situation for pool players than in lining his own pockets, and that is really hard to find.

As someone in such a powerful position as Mr. Griffin, he shouldn't be offering "opinions" as facts, which is exactly what I'm reading in his posts. It's an embarrassment on his part to make claims that he might be paying out more than APA if he can't back up such claims as fact.

An ambassador to billiards is someone who promotes the game regardless of who runs the business. A perfect example in this thread has been Ms. De La Garza. I'd value anything she said much moreso than Mr. Griffin, considering she isn't adding an agenda to her vast knowledge of the discussion at hand.

In this instance, Mark saw an opportunity to say or to imply negative things about his competitor rather than speaking of what he actually knows.

As far as your suggestion to stop offering merchandise as gifts, I can certainly pass on your memo for you. I don't think they will stop just because a handful of AZ Billiards members don't want them, however.

At the end of the cash, you have nothing to show for your finish in most tournaments. APA provides a keepsake or two that can be kept forever. A lot of people like that from the APA.

 

[APA LO]

I had to go back through the thread to find where they came up with the $350 figure, and I noticed that the player who spoke to APA finished in 9th place at Nationals.

While I'm no expert on this matter and don't wish to speak on behalf of APA regarding this subject, APA does award nicer cues the higher you finish in the Single's National events. So it's quite possible that he received one of the higher end models than someone who went two and out.

Several of our league members use their pool cue on league night. 30 some years from now they can tell their grandchildren about how they qualified and played in a National tournament and even show them one of the prizes they won. Maybe not a big deal to most of the skill level 7's and 9's hanging out on AZ billiards or even APA, but definitely meaningful to those skill levels who might never have had the chance otherwise.

 

[uwate]

The outlaw cues are total crap. All of them. I got one at Nationals and I couldnt sell it on Fleabay for 25% of what the APA assigned to their 1099 valuation. Which means basically even after I would sell it, I gotta hand that money and MORE to the IRS.

 

[Majic]

..........................................

 

[purpdrag]

As someone in such a powerful position as Mr. Griffin, he shouldn't be offering "opinions" as facts, which is exactly what I'm reading in his posts. It's an embarrassment on his part to make claims that he might be paying out more than APA if he can't back up such claims as fact.

An ambassador to billiards is someone who promotes the game regardless of who runs the business. A perfect example in this thread has been Ms. De La Garza. I'd value anything she said much moreso than Mr. Griffin, considering she isn't adding an agenda to her vast knowledge of the discussion at hand.

In this instance, Mark saw an opportunity to say or to imply negative things about his competitor rather than speaking of what he actually knows.

As far as your suggestion to stop offering merchandise as gifts, I can certainly pass on your memo for you. I don't think they will stop just because a handful of AZ Billiards members don't want them, however.

At the end of the cash, you have nothing to show for your finish in most tournaments. APA provides a keepsake or two that can be kept forever. A lot of people like that from the APA.

I've already expressed how much I respect Mr. Griffin, I will have to agree with you though, that because of his position in the BCA and CSI organizations, he should refrain from criticizing the competition.

I also do agree that it is nice to have a keepsake, but not when you are expected to pay more for it than you could sell it for when tax time comes around. The folks who got those cues and jackets probably thought they were great at first, now after getting these 1099s they probably get angry every time they look at them. From now on those prizes will most likely either sit in the back of a closet, or be given away or sold for a small fraction of the declared value.

 

[maldito]

Can't you write off the expenses incurred while playing on this APA - dues , travel to rm etc. against any winnings that they report to IRS ??? - also I could not find an Outlaw cue selling for over $200 - it sounds to me that APA or the local league operator is stiffing players by awarding inflated value to prizes and lining their own pockets with extra money instead of giving all cash . What about tours do they also give out 1099 forms to people who win tournaments ??

 

[whitewolf]

Can't you write off the expenses incurred while playing on this APA - dues , travel to rm etc. against any winnings that they report to IRS ??? - also I could not find an Outlaw cue selling for over $200 - it sounds to me that APA or the local league operator is stiffing players by awarding inflated value to prizes and lining their own pockets with extra money instead of giving all cash . What about tours do they also give out 1099 forms to people who win tournaments ??

Sounds like you just jumped in and didn't read all of the posts. Then your questions would be answered.

 

[stumpie71]

Can't you write off the expenses incurred while playing on this APA - dues , travel to rm etc. against any winnings that they report to IRS ??? - also I could not find an Outlaw cue selling for over $200 - it sounds to me that APA or the local league operator is stiffing players by awarding inflated value to prizes and lining their own pockets with extra money instead of giving all cash . What about tours do they also give out 1099 forms to people who win tournaments ??

Yes some expenses can be written off. The prizes jackets, cues, watches, or anything else must be claimed at MSRP (set by the manufacture) as per IRS guidelines regardless if these items were bought for less or donated. Yes other leagues and tours give out 1099's for any winnings or prizes valued over $599. Even local tournaments are suppose to give them for winnings over $599 or if these tournaments have break pots were the balls or pot are worth more than $599.

You can dispute the value of the prizes however if the items are new then the IRS generally will go with the MSRP.

 

[Mark Griffin]

Just an FYI -

This topic was discussed at the very end of the TAR Podcast #11.

Here is the link:http://www.youtube.com/watch?v=oJq1k6iBEH8&feature=youtu.be (Or you can go to www.theactionreport.com and click on 'podcast' - maybe listen to them all??)

I encourage posters active in this thread to listen to it. I asked those posters to contact me directly if they want to discuss it any further. I stated that I had received one CPA opinion of why to do this and will hopefully have another by next Thursday podcast.

I will then tell what I was told by the CPA. It does get interesting.
I also encourage anyone who has first hand knowledge of this practice to contact me. It seems like quite a few players have found themselves in this position. I know of one Vegas player that had this happen about 8 years ago.

This is not a witch hunt - but I believe I (or anyone else) should be able to talk about this situation without being accused of trashing the competition. If someone from the APA would respond, maybe everyone would understand why they do this.

Until that time, there are really only so many reasons. . . . . .

Mark Griffin

 

[bankshotbo]

I was playing last night where the league had just started up again and I overheard a girl say her old man got a 1099 from 2006. I could not hear the reason but she said something like he had won a tournament or a cue or something but was being taxed for a lot of money.

I went to Vegas in 2001 with my team and if they send me a 1099 now I will laugh and throw that beotch in the trash.