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This week is the final week of the NFFC Regular Season, which means that some of you will be receiving league prize money very soon. Add that money up with all of the NFFC Cutline league prizes and we have a lot of people to pay before the end of the NFFC season.

We always like to pay out those league winners before the end of the season and will do that again after Week 13 this year. Scores will be finalized for Week 13 next Thursday at 6 pm ET and at that point we'll get a spreadsheet of everyone who has won prize money to date. That will first be processed by STATS and sent to SportsHub likely by the end of next week. During the week of Dec. 11th, we will hustle to put this prize money on your new Player Accounts.

In other words, it's TIME TO GET YOU PAID!!

I am going to post a step-by-step process on how you claim your prizes shortly on this thread, but anyone who won in the NFBC this season knows how easy it was to Claim Your Prizes and then to request a check payment for any amount you want. You can keep all of the prize money on your account to spend on the NFFC Post-Season Contest, the Fanball Daily Drafts, CDM or even any future NFBC or NFFC contests. Or you can ask for all of it in the form of a check, which will go out in less than a week. Or keep some on your Player Account and ask for some payment. Whatever you want is now up to you as these new Player Accounts are going to be great for everyone.

Oh, and we have a special deal for you if you do keep some money on your account. We want to try to avoid those 3 percent credit card fees in the future, so look for this special offer when you claim your prizes. I think you're going to like it.

So once the prizes are posted within your Player Account, make sure you already have the W-9 Online filled out because that is still required. Again, after that the two steps are to Claim Your Prizes and then Withdraw Funds if you want any money in a check. Easy enough.

Now, just for clarity, anything you leave on Account is still taxable. We will report your complete winnings to the IRS whether you leave it on account or not. These are still taxable winnings according to the IRS and even rolling them over to next year's contests isn't a shield from the IRS. We'll let other contests who do it this way justify this method.

One check will be sent for all winnings from our CDM offices in St. Louis once you've declared how much you want in cash prizes. The money you leave on your account can be used for future CDM, NFBC, NFFC, Fanball or any other contest in the SportsHub Technologies family. It's as simple as that.

Hope that helps. If you have any questions, post them here or contact me at [email protected]. We look forward to dispersing over $3 million in prizes this season and over $1 million in just two weeks. We wish everyone best of luck down the stretch. Good luck all and thanks.

Again, more details on exact steps on how to claim these prizes coming soon.

I happen to to know some tax accountants who do fantasy sports on occasion. I will acknowledge that the IRS is not perfectly clear on how operators should report winnings. However, the cumulative net method certainly appears to be legal.

Here are the accepted practices for reporting fantasy sports winnings:
https://www.journalofaccountancy.com/ne ... nings.html

I would like to note that this (and the IRS ruling mentioned within) allow for the cumulative net method:
The cumulative net method. The site operator reports the player’s total winnings less all entry fees for the year, regardless of whether the participant received a prize.

This is substantially different from the net method currently used by the NFBC (and also a legal method): The site operator reports the total of all winnings for the year and subtracts the entrance fees from winning contests only. These are also reported on Form 1099-MISC, assuming the net amount the player wins exceeds $600.

The cumulative net method would be better for players.

We will be reporting this year your winnings and subtracting the entry fees for those winning leagues. We do not include entry fees for leagues you didn't win money in, per the law here:

The net method. The site operator reports the total of all winnings for the year and subtracts the entrance fees from winning contests only. These are also reported on Form 1099-MISC, assuming the net amount the player wins exceeds $600.

The cumulative net method. The site operator reports the player’s total winnings less all entry fees for the year, regardless of whether the participant received a prize.

The IRS concluded in the 2005 letter ruling that the net method must be used when entrance fees are only netted against winnings from that particular contest as a return of capital—entrance fees on losing contests are not deductible against winnings from other contests.


Are you saying that all entry fees should be included in our reporting? Are you saying other contests are doing that?

I'm curious. Let us know.

Greg Ambrosius wrote: Are you saying that all entry fees should be included in our reporting? Are you saying other contests are doing that?

I'm curious. Let us know.

I am saying that it would be better for players if all entry fees were included. The one time I received a 1099 from FanDuel, they definitely used the cumulative net method. The article even notes:

most leagues report amounts in box 3 using the cumulative net method, i.e., winnings less total entry fees

Greg,

Where does one find the online W-9 form? I thought there used to be a menu option but can't seem to find it.

Thanks,

Mike

I also wish what you reported included ALL entry fees. The way you currently do it, I get a 1099 for my winnings and have to pay tax on it, even in years that I'm net negative overall. If the IRS considered fantasy sports "gambling", we could offset all winnings with all losses. As it is now though, it stings to pay tax on a small portion of winnings when overall I'm down on a year; that should be a net loss and no taxes paid.

So we will receive just 1 1099 in the mail then?

CoMoHusker wrote:Greg,

Where does one find the online W-9 form? I thought there used to be a menu option but can't seem to find it.

Thanks,

Mike

That will now show up on the new Claim Prizes page next week. It's not on the STATS game site anymore because they aren't paying the prizes. Everyone will have to fill that out again, even if you won prizes in the past.

Thanks and look for that soon.

Sandman62 wrote:I also wish what you reported included ALL entry fees. The way you currently do it, I get a 1099 for my winnings and have to pay tax on it, even in years that I'm net negative overall. If the IRS considered fantasy sports "gambling", we could offset all winnings with all losses. As it is now though, it stings to pay tax on a small portion of winnings when overall I'm down on a year; that should be a net loss and no taxes paid.

We would like to do it that way too, but from Clark's link you can see we can't do that. We don't report this as gambling winnings. We report this as earned income. From Clark's link:

The IRS concluded in the 2005 letter ruling that the net method must be used when entrance fees are only netted against winnings from that particular contest as a return of capital—entrance fees on losing contests are not deductible against winnings from other contests.


But if you itemize your taxes you may be able to use other entry fees as expenses. Check with your accountant for more information on that.

Just a couple of follow-up questions about the timing of the taxable winnings (2017 vs. 2018)

I assume any winnings above entry fee for the season ending week 13 will be in our accounts shortly and as such taxable in 2017 even if we request a withdrawal after January 1st. Is that correct?

Additional Winnings earned at the end of week 16 (satellite, championship rounds, cutlines, etc.) will be "won" close to the end of the year considering the season ends Christmas. Do you expect those to hit our accounts in 2017 or early 2018? I assume if it's early January then anything that hits the accounts in January to be taxable next year.

It would be great to somehow defer winnings into Jan considering the possible lower tax brackets.

Thanks in advance,
Pete