IRS: Nominees, presenters, writers must pay taxes

by Brian McKim & Traci Skene on August 29th, 2006

On those nifty gift baskets, that is. The IRS says it will tax the recipients of gift baskets. Through their participation in the Oscar ceremony, actors, directors, presenters and writers receive a huge list of Blackberries, I-Pods, hotel stays and kimonos. Up through the ’05 event, they were not required to treat the swag as income. All that has changed. Most are speculating that it will signal the end of the gift basket as we know it. Assistant producers at Extra!, Hollywood Insider and Entertainment Tonight are hyperventilating, weeping and contemplating life in a monastery, as the demise of the gift basket will open up nearly uncloseable holes in the programming of those three wretched shows. The Gift Basket has itself become somewhat of a celebrity and the companies that contribute trinkets to them must now find other, creative ways to pimp their products.

Why should anyone care that a bunch of fatcat H-wood types don’t get a free 6-night stay at the Ihilani Resort & Spa? Well, we would counter that not all who receive the loot are fatcats. And we wince at the possible tax bill on a sack of goodies with a $100,000 price tag! And we would further counter that not all who have ever been invited to Hollywood’s Big Night are so well off that a nice, swollen bag of booty wouldn’t be appreciated in a very fundamental way. And that a gargantuan tax bill for said sack would be an actual hardship. (Considering the capricious nature of Tinseltown, how many times in the past 40 years or so do you think there might have been someone out there who actually could barely afford to attend Oscar night? Or couldn’t attend at all? Trust us, we’ve had first- and secondhand knowledge of similar situations.) It seems wildly unfair to shift any tax burden to the recipient. The folks who give the goods are receiving millions of dollars in publicity (Note: It is not “free” publicity. That is a phrase used mindlessly. It might only be considered wildly inexpensive.), so why don’t they figure out a way of taking care of Uncle Sam?

Allegedly one company has done so, introducing the concept of “gifting rooms,” where giftees select the cellphone or the tennis bracelet or the vacation package, then proceed to a table where they give some or all of their lucre to charity and receive a letter absolving them of a certain amount of tax liability. It all seems so tawdry. Surely there are tax lawyers out there who can figure out some sort of ingenious loot loophole.

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