It was only a matter of time.
Cry cry cry, the IRS taxes income Americans earn in foreign countries, including Olympic prizes:
As 230 U.S. Olympic athletes gear up to compete in the 2014 Winter Games, the only thing colder than the slopes at Sochi is the fact that any prizes awarded by the U.S. Olympic Commission (USOC) will be taxed by the IRS. Many Americans don't realize that the U.S. taxes income earned abroad, and as such even the winnings of Olympic athletes are subject to the reach of the IRS.
The USOC awards prizes to U.S. Olympic medal winners: $25,000 for gold, $15,000 for silver, and $10,000 for bronze. Relative to each athlete's income tax bracket, some top earners such as Shaun White could end up paying over a third (39.6 percent) of their winnings to the IRS.
This is the point where you are supposed to get super outraged and gasp how dare they!
It is estimated Shaun White brings in $10 million a year, I doubt he's going to miss $10k. ATR makes it sound like the IRS is showing up with an industrial cheese grater shaving a third of the actual medals off for themselves.
Of course, they wouldn't be ATR if they didn't.