Should golf rater rounds be considered taxable income?

[Andy Troeger]

Kirk,
Regarding your question to Adam...

Raters are not compensated by the magazine in any way. They are responsible for all their own expenses, including at the golf courses. We are very emphatically told by the magazine to expect to pay when going to rate a course. If the course chooses not to charge, that is their choice. That's why I have a hard time making the connection of any valuable compensation between the publisher and the rater. The value is really bestowed by the golf course based on the way the arrangement is set up.

I do see what you're saying that there is a benefit from course to publisher and vice versa, but I don't know if that gets us any closer to an answer for the tax question.

Mike,
Wouldn't surprise me in the slightest if this is at least reviewed at some point. I don't want to turn this into a political argument, so I'll leave it at that 

[Michael Whitaker]

IMHO I think we need to think about this not as just raters but also about theater enthusiast and many other such positions.  Personally I'm not condemning the raters, I'm just telling you it's coming.  When an insurance company sends an agent on a week long trip to Hawaii as a sales incentive he usually gets a 1099 based on a perceived value of the trip, companies are now filing 1099's for airline miles and hotel points and if you win a wide screen TV at your local charity benefit you will receive a 1099.  JMO   Come see us now that you are back in the South.

Mike,

The examples you site have always been taxable. Nothing new there.

Inviting a group of raters to visit a golf course (or a broadway show) and using their opinions for marketing purposes does not make the act of visiting the course a taxable event. How the course hopes to benefit from the raters visit is immaterial. They can just as easily get a bad rating as a good one... there is no way of knowing what the outcome will be.

There is not a theater critic on the planet that pays for his ticket to attend and review a show. I'm sure the Broadway show that invites the reviewer to see their production hopes they will get a good grade so they can use that to sell more tickets. But, like golf, it usually doesn't work out that way. Should the theatre critic get a 1099 for all the shows he attends and reviews? No. And, neither should the people who review golf courses... whether they do it as an individual or part of a group.

It's good to be back in the South... somehow strangely comforting to see macaroni & cheese listed as a vegetable at my local Meat & 3 restaurant. 

[Mike_Trenham]

Should pros, architects and other industry guys get a 1099 for reduced rate or comp rounds?

John,
You probably know better than myself but I don't think so.  I don't think anyone should unless it is in trade/barter for a service received.  For example if an architect was to trade his services to ANGC for rounds for himself and/or friends then yes he should receive a 1099.  If he gets a comped round because it a professional courtesy then I don't think so.  IMHO the ONLY reason a course is allowing the rater to play is so they may hopefully receive a rating in a particular magazine. 
Hope you are having a good week.
Mike

I bet somebody tried to exempt their company from the 50% cut to the deduction by calling a sales reward trip a commission not T&E and the IRS then suggested the need for a 1099.

[don_bartlett]

If comped rounds are to be considered income, then we need to understand the expense side for this, and who would be responsible for paying said expenses.  Would the govenment that the panelist pays taxes to, be responsible for paying them?  If a panelist is going to be set up as a business, they would be essentially writing off any expenses associated with comped rounds.  In this scenario, the only expenses being talked about from the panelist's perspective is travel, and lodging, but what about the courses that charge the panelist a green fee?  Would the rater be able to expense that? 

[Bill Seitz]

If the idea is that a rater's "job" is to review courses, then presumably expenses paid to do that job would be deductible.  More likely, in any sort of employer/employee relationship, the employer would reimburse the expenses, so the cost to the rater is already nil.  Similarly, a food critic is almost certainly reimbursed by his/her employer for the cost of meals (taking comped meals is a bit of a no-no from what I understand).  Or to take Michael Whittaker's example, if theater critics had to pay for their tickets, they would also deduct the cost of those tickets from their taxable income.  So no, this isn't taxable income.  It's been brought up in this thread (I think), but things that we may see as perks aren't actually characterized as such by the IRS.  I like going to baseball games, but if I were a sports writer, I wouldn't expect to be taxed on the value of tickets that I didn't have to buy, and even if I were charged for entry, they would be deductible as a legitimate business expense.  

Moreover, I have a hard time buying into the idea that comped rounds are compensation for services rendered when there is no guarantee of any services being rendered.  I'm not a rater, but my understanding is that there's no expectation that EVERY round a rater plays must be submitted (and it would be difficult to police anyway).  And while certainly a comped round at a club might entice me to review their course, there's nothing requiring me to do so.  There's not even really an implied contract.  And as Michael pointed out, there's just as good a chance that the review is counter to the club's interest rather than productive.  

Full disclosure, I've been employed as a tax consultant for the last ten+ years, and I'm probably not the only one here.  Though admittedly, while I've dabbled in a bit of everything, my area of expertise is sales and use tax.