What happens when an American athlete secures a podium finish—but represents another nation? For high-net-worth competitors, the tax and forensic accounting implications of these decisions are about to become highly scrutinized by federal regulators.

A new federal proposal introduced ahead of the 2026 Winter Games seeks to impose a sweeping 100% excise tax on specific income earned by U.S. citizens and permanent residents who compete internationally for certain foreign governments.

Essentially, some professional athletes might be forced to forfeit every single dollar of their international earnings.

Understanding the Proposed OLYMPICS Act

The legislation, officially named the Officially Limiting Yearly Money Procured by Individuals Concerning Sportmanship (OLYMPICS) Act, targets cross-border compensation. It proposes a 100% excise tax on:

• Income derived from competing in international events
• Direct prize money
• Sponsorship income directly tied to foreign representation

Currently, the bill specifically targets individuals representing China, Russia, Iran, and North Korea. However, legislative amendments could easily expand this list. The tax would affect major global stages, including the Olympics and the World Cup.

The Catalyst Behind the Legislation

This proposal is not arbitrary; it is a direct response to recent high-profile sports events. A prominent focus has been Eileen Gu, a U.S.-born snowboarder competing for China.

Gu represents a complex intersection of international sports and significant wealth generation:

• She reportedly earned millions in payments tied to Olympic performance from Chinese authorities.
• Over several years, those payments totaled nearly $14 million in government-linked support.
• She also earned over $20 million annually from endorsements and sponsorships.

Global Representation is a Standard Practice

While this legislation highlights recent winter games, athletes changing national representation is standard within global sports. Decisions are often driven by dual citizenship, better qualification opportunities, and access to superior funding.

For example, golfer Rory McIlroy represents Ireland globally despite his primary presence on the U.S. PGA Tour. In the NBA, stars like Joel Embiid and Luka Dončić navigate international competition alongside lucrative domestic careers. Track athlete Bernard Lagat famously competed for both Kenya and the United States.

Worldwide Income: The Current Tax Reality

Even without the OLYMPICS Act, high-net-worth athletes face incredibly complex cross-border tax compliance. The United States enforces taxation on worldwide income. This means dual-national athletes routinely navigate obligations in multiple jurisdictions, leading to potential double taxation risks.

As one analysis highlights, competing for a nation tied to family heritage instantly complicates global wealth management.

Tax Policy and Forensic Complexities

At SULLIVAN & COMPANY CPA INC., our forensic accounting and valuation teams frequently analyze how governments use tax codes to influence behavior. From environmental credits to this proposed international sports penalty, the line between revenue generation and behavioral regulation is blurring.

If passed, enforcing this act would be a logistical labyrinth. Tracing offshore sponsorship revenue, valuing international endorsement contracts, and unraveling complex entity structures are significant forensic accounting challenges. Would routing payments through foreign trusts bypass the excise tax? These are the valuation controversies high-net-worth families regularly face.

Protecting Your Financial Legacy

Most taxpayers and family offices in Burlingame and the surrounding Bay Area will never face an Olympic-level excise tax. However, the core principle remains: in our global economy, taxes follow your decisions, regardless of borders. International work, overseas assets, or complex entity structuring can trigger sudden IRS scrutiny.

Whether you need defensible valuation methodologies, estate and gift tax compliance, or strategic litigation support, clarity is essential. Contact Brian A. Sullivan and the specialized advisory team at SULLIVAN & COMPANY CPA INC. to ensure your financial legacy is protected and fully compliant.