 Goodie
bags for celebrities
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 Dear
Tax Talk,
I was watching "The Sopranos" the other night. In the
episode there was a hotel room where celebrities could go and pick
from a bunch of products that were offered by companies like watches
and sunglasses. Do they have to pay taxes on that?
-- Christina
 Dear
Christina,
Celebrities often get free lunches, but not from the Internal Revenue
Service. Prizes and awards have always been taxable income. Promoted
items would be taxable and the giver should file a 1099 statement.
On March 3, IRS provided the following press
release:
The commissioner of the Internal Revenue Service wished the Academy
Award nominees the best of luck at Sunday's presentation, but
he reminded celebrity recipients of the six-figure goodie bags
that they qualify as taxable income and must be reported on tax
returns.
"As the world watches the glamour and glitz of the Academy
Awards, it's important to keep in mind that movie stars face the
same tax obligations as ordinary Americans," said IRS Commissioner
Mark W. Everson. "We want to make sure the stars 'walk the
line' when it comes to these goodie bags."
Handing out of celebrity gift bags and goodie bags has become
increasingly commonplace. News reports about the 'official' Oscar
gifts that will be given to stars place the value at more than
$100,000.
"This has become big business for companies promoting their
products. These things aren't given without pride and prejudice.
There is a tax implication for them. We just want to make sure
no one crashes into the tax code," Everson said.
I think "Crash" and "Walk the Line"
were very clever choices, though I don't recall that "Pride
and Prejudice" was nominated. Of course, we all know what Tony
Soprano would say about that: Bada bing.
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