Be careful about the prizes you give away to fans at the ballpark. If the value of the prize is over $600, your winner is supposed to receive an IRS Form 1099 from you, so they can report and pay taxes on on the winnings. This could backfire for you in the fan-relations department.
Houston Astros fan Bob Choate was probably feeling pretty good when he won 315 coffee and doughnut coupons from Shipley’s Do-Nuts at an Astros baseball game last year, but he wasn’t too pleased to receive the 1099 from the Astros indicating that his prize was valued at $927,61, and he was going to have to pay taxes on doughnuts and coffee he might not have even eaten yet. Read more here.
To be clear, just because the value of the prize is under $600, doesn’t mean a winner is free from any IRS tax liability, but… Please consult a tax attorney or other tax professional (not us!), if you have any questions about taxable winnings.
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