Why Kenyan athletes face tax deductions hurdles abroad

Kenyan athletes are still facing legal hurdles over tax deductions in the United States.

Many have unclaimed tax refunds after racing in the American road running circuit, Kenyan lawyer based in Washington, Ben Akech says.

“Each year, hundreds of professional Kenyan runners and athletes participate in races in the United States. The Internal Revenue Service (IRS) considers athletes who receive prize money from races as contractors and subject them to a 30 per cent taxation withholding on the income earned,” he said.

“Getting the right advice can make the difference between hundreds of thousands in dollars of savings from money received after winning a race. For instance, the prize money for winning the 2022 Boston Marathon race was $150,000.

Of this sum, the race organisers automatically withheld $45,000 (30 pc). By getting proper legal advice, it is possible to reduce the amount paid and get a tax refund from the IRS on behalf of the athlete who won the race.

But most agents representing athletes can’t assist with this process because they do not have the expertise and are not licensed in the US to engage the IRS. Consequently, many athletes leave tens and hundreds of unclaimed with the IRS each year,” said Akech.

“As an attorney licensed in Kenya and the United States, I am currently engaging IRS on behalf of Daniel Limo and Olga Kimaiyo (past winners of Los Angeles Marathon),” he said.