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junebugged
February 4th, 2008, 1:14am
Ok guys I have yet another tax question because there are a million of them out there already but none answer my question.

I won the Six Flags Dream Nite Sweepstakes....

This is an excerpt from the rules:

Each winner that is a United States resident will also receive a cash stipend to defer a portion of the cost of any taxes associated with winning the prize in the amount of one thousand two hundred eighty dollars (U.S. $1,280) per winner. The cash stipend will be distributed after the Dream Nite event. Each winner is solely responsible for any and all other costs, fees, taxes and expenses associated with prize award, receipt and its use, including, without limitation, all transportation, lodging, and additional meal and other costs for the winner and winner's guests in attending the "Dream Nite" at the applicable Dream Nite Theme Park, and all federal, state, foreign, provincial and local taxes on the prize. Each winner that is a United States resident will be issued a United States Internal Revenue Service 1099 tax form for the approximate retail value ("ARV") of the prize. ARV of each prize in this Sweepstakes is estimated to be four thousand four hundred eighty dollars (U.S. $4,480), which includes the cash value of the stipend.

So I got a 1099 directly from Six Flags for $1280.
I figured I would be getting another for the remainder and I sure did...

Yesterday in the mail I got a 1099 from the promo comany (U.S. Sweestakes) for $5400 .....WTH?

So what do I do now? Can I amend the 1099 and include the rules as proof of the listed ARV? There is really no way to itemize a prize like this.

Please help....

lifesfun
February 4th, 2008, 1:25am
I had a win in 2005 and they sent me a 1099 with an incorrect amount and then later sent me a corrected 1099. Maybe you can contact them and let them know that they made a mistake. I think that's what I would do.

robsterclaw
February 4th, 2008, 1:26am
Oh that's a hard one! I'd ask a tax professional on that one. We can give some advice based on experience, but in your case I'd ask a pro. My opinion is to call the sponser and ask if there were a goof up and then go from there.

fastfreddie1959
February 4th, 2008, 1:31am
ARV of each prize in this Sweepstakes is estimated to be four thousand four hundred eighty dollars (U.S. $4,480), which includes the cash value of the stipend.

How can they make it higher ?
Does not sound correct to me.

yadgirl
February 4th, 2008, 1:38am
Contact the sponsor or the judging agency, and tell them what the rules say. They should send you a corrected 1099.

That way, no questions from the IRS.

InkyPrincess
February 4th, 2008, 1:43am
ARV of each prize in this Sweepstakes is estimated to be four thousand four hundred eighty dollars (U.S. $4,480), which includes the cash value of the stipend[/B]


Keyword there, ESTIMATED. Sometimes plane tickets cost more than they "estimated" when the rules were written. There is no possible way for them to know how much the winners plane tickets are going to cost when writing the rules. There could be other factors in there that raised the ARV. I don't know. Call the sponsor and ask what those are. I have a feeling though that the new 1099 is including your cash stipend too.

Just an an example. I won a trip from Kelloggs a couple of years ago. ARV was $10,000. My tickets were purchased last minute by the sponsor at about $2500. Ouch. First of all, I live in a smaller city, so we had to fly to a big city first then fly to Arizona. That jacked the ticket price way up.... something that probably wasn't factored in when they wrote the rules. My 1099 ended up being about $11,000.

InkyPrincess
February 4th, 2008, 1:47am
How can they make it higher ?
Does not sound correct to me.

That's why they put in the word estimate. The sponsor has no idea how much exactly the trip will cost.

lifesfun
February 4th, 2008, 1:51am
When I signed my affy it gave me the amount I would be taxed on. I don't know if they all do that but the ones I've signed have so far.

mommytolili
February 4th, 2008, 1:51am
I would definitely call them, because that's a difference of $2200 (since you already received a form for the cash portion). That is a HUGE jump. An estimate should not vary that much, that's ridiculous. It would be like getting an estimate for a car repair for $1000, and then getting a bill for $2000.

junebugged
February 4th, 2008, 3:37am
Well, there are no plane tickets and nothing that could "become" higher....

Prize was 101 admissions to Six Flags, and food per person, possibly a cost for them shutting down the park for the winners.

In all actuallity I didn't even have 100 people show up. But I don't care about that, I just care about them changing the arv on something that they obviously calculated before hand.

CheckedOut
February 4th, 2008, 4:51am
definitely call them and discuss first. tell them your (obvious) concerns and see if they
can explain it , and more importantly request a breakdown from their files as to how they
arrived at that figure. if you dispute the value the burden is on them to provide specifics.

on the other point - ARVs listed in the rules are not tax binding - they are just an estimate.
and while they usually err on the high side, various things do change between the time
the rules are drawn up at the start of the sweepstakes and the time the prize is fullfilled.
heck, maybe they changed their own rates in between that time.

bottom line is that if they can "prove" your prize was the higher value, there probably isnt
much you can do about it. the cash they are offering to offset the taxes isn't a guarantee
you wont have to pay any tax because they dont know what tax bracket the winner is in.

there may be some gray area in what they charge for some of these things (like closing
a park down) so if you are nice about it, you might be able to convince them to lower
the final value if it comes down to that....if you demand things based on the initial ARV,
they might not feel the need to be too helpful...

good luck!


ETA - reading your last post, i'd have to think you, or they kept a tally of exactly how
many tix of the 101 you used, so if you only used 50, that could be a point of contention
for lowering the ARV. At $30 a ticket, thats $1500 right there.

luckyboy
February 7th, 2008, 2:06pm
Congratulations Junebugged! Wasn't that fun! I won too and felt like a KING granting access to the park for so many friends and family. I even "made up" 'the excess by inviting some children shelters and volunteer groups.

My 1099 was for $5760. I called their accounting dept. yesterday and left a message. I think they will be sending out corrected 1099's. WATCH OUT because my amount is in box 7 and should be in box 3 to apparently keep the tax rate a bit lower??? I asked that they change that too.

Again, I hope they do it again this year it was REALLY a blast to see my guests walk up to the food counters and NOT have to pay for anything!!!! :blues:

DWils29
February 7th, 2008, 2:45pm
I would contact them because I'm sure you got a discounted rate (general admission tickets usually go for $59.99 each!!). I had the same problem with Sirius radio and I ended up getting the actual receipts from the limo company and hotel. Came to $2,200 as opposed to the 1099 value of $3.500. They never did send me a revised 1099 but I entered the actual ARV and kept all the receipts!

junebugged
February 9th, 2008, 12:58am
Hey luckyboy!!

Im glad I checked back in on this thread. Nice to see that there was another OLS winner!

Thanks for the info..nice of you to invite the shelters and children's groups, I wish I had done that instead of inviting a whole bunch of my friends and family that didn't even care to show up. (Those that did had a freaking blast)

I still haven't contacted them yet, what was the contact number you used?