IRS wants its cut of celebrity freebies
'Outreach' program reminds the beautiful people that nothing -- not even awards show 'swag bags' filled with watches, electronics and trips -- is truly free. Movie stars who took home those lavish gift baskets handed out at this year's Oscars will get some decidedly unglamorous notices: Don't forget to pay tax on the loot.
"There's no special red-carpet tax loophole for the stars," Internal Revenue Service Commissioner Mark Everson said Thursday. The Academy of Motion Picture Arts and Sciences, in an accord with the IRS, agreed to pay taxes due on gift bags handed out through last year. Neither organization would say how much tax was owed or paid.
But responsibility for paying taxes on the latest gifts, handed out in March, falls on the recipients. They will be getting tax forms from the Academy as reminders.
The Academy of Television Arts & Sciences recently sent out letters to presenters and nominees scheduled to appear on the Aug. 27 Emmy Awards advising them they will be responsible for paying income taxes on the freebies in their "very special Gift Bag," worth between $27,000 and $33,000. Every recipient, the New York Post reported, was asked to sign and return a letter to the Academy acknowledging, "You are aware of this obligation . . . We will not be able to present a gift bag to any individual for whom we have not received this signed letter in advance."
The Academy hinted it might be forced to turn over a list of its swag-bag recipients to the IRS. Not given 'solely out of affection, respect'
The agreement marks the beginning of an IRS effort to remind the entertainment industry that award-show gifts and promotional giveaways are considered taxable income. (Read the IRS Q & A on gift-bag taxes.)
By MSN Money staff and wire reports
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