I asked a few friends of mine and the consensus seems to be, based on current social preferences, they should.
For example, if you support Bernie, then they DEFINITELY should pay tax to the IRS on their medal because they are clearly the top 1% of athletes, and Bernie is all about taxing the top 1%.
If you are more of the “fair is fair” type, and who isn’t these days in this Social Justice Warrior world of ours, then it is only fair that if they choose to make a career out of being an athlete, and are subject to taxation by the IRS for international income just like the rest of us, then it is only fair that they pay taxes on that medal.
So that means, Olympians that cannot pay the tax on the medal will simply have to sell it so they can pay the taxes on that income. If they refuse, fail to pay, or don’t return the medal, then they should go to jail – just like the rest of us would.
Note: As a Libertarian, I am against ALL income taxes, including this one (if you can call it that), but the world is what Americans have voted it to be, and Americans have decided by their votes that this world requires that Olympians pay taxes on their medals.