As the country continues to follow Tiger Woods, and the excessive media coverage of his transgressions, many financial experts are beginning to wonder what – if any – tax implications his affairs might lead to. According to reports, Tiger gave away thousands in “hush money” to different women, and as the Improper.com points out in this article it could result in a gift tax penalty.
Woods reportedly wired tens of thousands of dollars a month to his mistresses, according to MSNBC, quoting several unnamed women who were involved with the golfer. The dollar amounts range from $5,000 to $10,000 per month, and some of the women claimed to be getting as much as $20,000 per month.
“The money comes via a wire transfer,” one woman told MSNBC. “There’s no contract about it, there’s no discussion about what it’s for, but it’s implied that it’s in exchange for keeping quiet about his affair.”
If Woods is paying women to be quiet, he better have covered his tracks, a tax expert said. “The IRS regulations require that someone gifting in excess of $13,000 per year file a gift tax return,” John Fisher, a Pennsylvania-based tax attorney, told the New York Daily News.
In addition, any person who receives $10,000 or more in gifts must report the amount on their tax return, declare the money as income and pay taxes on it.