Taxes

1) You don’t pay any taxes on prizes under $600. If you do win a prize over this amount you will receive a tax form from the company sponsoring the sweepstakes and you will return that with your federal taxes.
2) If you win a prize at the end of the year, yet do not receive it until the next year you will not pay taxes on it until the following tax year. For instance, let's say you won a prize in December of 2007, but you did not receive it until January 2009. You will not pay nor file this on your taxes until you prepare them in 2009 (for the 2008 taxes). Again, this is only in the situation if your prize(s) is over $600.
3) You can argue the ARV of your prize with the IRS if you feel it’s too high. At the time you win the prize, do some research on the Internet to see what the Fair Market Value of the prize you won and print off your results (with a date stamp) and save that. Two options for arguing the ARV: First, contact the sponsor of the sweepstakes and ask them to lower the ARV before they fill out their tax form. Second, if the sponsor doesn't comply, you can still list the ARV on your tax form at the level you feel is correct and include the print outs of your FMV research for the IRS to review.