In The Hole

Just a few days before Christmas last year, multiple players who lost their PGA Tour cards after the 2023 season received a phone call from the PGA Tour. These players were informed they owed the Tour money. The debt stemmed from taxes the Tour failed to account for when giving players a $500,000 advance prior to the 2023 season. Over a year after receiving the payment, and without communication about the tax issues before the December phone call, some players were frustrated. The players had lost their PGA Tour cards, missed getting them back at Q-school, and now learned they owed tens of thousands of dollars. After being told about the bill, one player responded,  "Well, Merry Fucking Christmas." 

In August 2022, PGA Tour commissioner Jay Monahan announced a new incentive for all fully exempt PGA Tour members for the 2023 season. Every fully exempt player would receive a $500,000 guarantee from the Tour. The 2022 Korn Ferry Tour graduates, who would be progressing to the PGA Tour, received the money up front as an advance against future earnings, and could earn prize money from tournaments once they surpassed $500,000 in earnings. If players didn't reach half a million in earnings, they wouldn't have to pay the difference back.

The Tour, however, did not account for the state taxes each player would owe, or provide any tax or financial guidance about the new program. The players who did not reach $500,000 in earnings received no communication about the Tour paying state taxes on their behalf until the phone call before Christmas. 

According to the players I spoke with, they didn't sign any legal documents before receiving the money. No one considered that players would have a tax burden in every state they made a cut in because players weren’t actually collecting winnings from those states until they surpassed $500,000 in earnings. Players paid federal income tax on the advance, and since the Tour is based in Florida – where there is no state income tax – most assumed there were no state tax obligations.

In the phone call before Christmas, the Tour informed players they owed the Tour for various state taxes with amounts ranging from just over $10,000 to $60,000. The Tour also informed the players that if they were unable to pay, the Tour would be taking players’ KFT checks in 2024 until the debt was repaid. 

The same year the PGA Tour was investing hundreds of millions into their top players with limited field events they were garnishing checks of roughly 10 Korn Ferry members. 

Player reactions to the call varied. "I'm still pissed," said one. Another player added, "Yeah, it sucked, but there was nothing I could do. The Tour is going to do what they want.” Another added, "It should have surprised me, but didn't." Although others didn’t question it and quickly moved on, “I’m pretty laid back, I paid it, and moved on.” 

Some of the players I spoke with paid the amount back in one lump sum, while others paid a portion of each check. At least one player, who struggled on the course last year, still hasn't paid back the total amount. That player had 50% of his KFT season earnings taken. The players I spoke to told me they have never seen a digital or paper printout with a detailed explanation of the taxes owed. One player said he received the remaining amount he owed via text after he asked about the remaining balance. The text did not offer a breakdown of what had been paid, or an explanation of the original amount. 

Two players I spoke with have discussed the situation with a lawyer to see if the Tour had a legal right to garnish their wages without anything in writing. 

The Tour amended the program for the following season’s KFT graduates: these players were given $400,000 as an advance (according to sources, foreign-born players were given $376,000) instead of $500,000.  At the end of the season, the players will receive a check from the Tour for the difference between the taxes the player owes and the final $100,000. For example if the player's state taxes add up to $60,000 for the season, the player would receive a check for $40,000. 

Following LIV’s debut, the PGA Tour announced changes without fully considering future consequences. They brought back PGA Tour cards for Q-school, and entered into a partnership with DP World Tour to give the top 10 players Tour status. Yet, some of the KFT and Q-school graduates struggled to get into PGA Tour fields. 

The Tour then eliminated the wrap-around season, designing the fall portion of the schedule to decide who kept their Tour cards. Because of smaller signature field events and more players contending for spots, the start of the 2024 season was a mess for many new members. The Tour planned rookie orientation for the week of the Sony Open in Hawaii, yet many of the rookies weren't even in the field. The Tour had to reimburse the players who were forced to make the long, expensive trip just for the orientation. 

The announcement of the $500,000 advance program was welcomed by players, as the cost of playing on Tour is significant. The upfront cash would help to pay swing coaches, launch monitors, and travel before players earned a check. In theory, it was a great proposal. The Tour, however, forgot one thing: to educate players about the nuances of their tax obligation under a brand new program. 

Pro golfers’ taxes are complicated because they are usually required to file a return in every state and country where they earn money. If a pro plays a full PGA Tour season, he (or his accountant) might have to file returns in 20 states. All of this makes the Tour's lack of communication throughout the season seem avoidable.  

Additionally, some players didn't actually want the advance. One said, "I don't know why, but I like to see the check go into my account the next week. I didn't want to go weeks without seeing one. "The Tour told him he had to accept the advance. 

Another player told me, "An email they sent before the checks came out said we had a choice, but it just showed up in my account one day." A copy of that email I obtained confirms the Tour said the players had a choice.

The PGA Tour, when reached for comment, provided the following statement: “As a matter of policy, the PGA TOUR does not comment on private player financial matters.”

The Korn Ferry Tour season starts in January with multiple expensive international trips that come with costly flights and hotels. These costs are expected. For some players, the unexpected debt that came from the PGA Tour before Christmas was a taxing way to begin the season.

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