Winning Money Online

[2Curious]

What is the name of your state? AZ

I'm unsure where this post should go but figured this may be the best place to post my question. I'm going to have an online competition where visitors to the site will vote on contestants and the winner will receive prize money (amount yet to be determined) weekly. I understand that we must report anything to the IRS but are there any legal issues that we should definitely keep in mind?

 

[racer72]

How many other sites do you see like this?

 

[JustAPal00]

As long as it is free to enter, it's not a lottery and should be no problem!

 

[outonbail]

Where exactly is this prize money coming from? Is there an entry fee paid by contestants, site sponsors, or product advertisement money?
What is it that the contestants will be competing at?
Are they participating in an activity that requires skill or will chance and/or luck provide a contestant with votes?
Is this site going to be aimed at children, teens or adults?
Will participants be Local, state wide, Country wide or chosen from an international pool of people?

There are so many possibilities with what you've posted, that in order to get the answers you're looking for, you will need to include allot more information on what exactly it is you're doing, or inviting others in to do. You will also have to ballpark what kind of prize money you're talking about paying out to winners. This will be the determining factor as to whether or not you have to report the pay outs to the IRS or not. For instance, most Casino's don't require your identification and SS# for any winnings below two thousand dollars. Over that amount and they usually want all tax information and then provide a copy of the W-2 form to the winner at the time they pay them.