Community Affairs
IRS Hollywood Foreign Press Reach
Agreement on Swag Bags
As marketing companies have become more and more aware
of the promotional potential of celebrity branding, award show gift bags,
which began simply as tokens of appreciation for award show presenters,
performers and winners, have become increasingly elaborate collections of
extremely costly and lavish items- and the Internal Revenue Services (IRS)
has taken notice.
In a recent release, the IRS announced regarding the
taxability of gift bags and promotional items that they came to agreement
with the Hollywood Foreign Press Association (HFPA) “that will resolve
outstanding tax responsibilities with respect to Golden Globe Awards
presenter gift baskets.” According
to the terms of the deal, the HFPA will foot the bill for back taxes due on
gift baskets through 2005. Last year’s
swag recipients at the 2006 Golden Globes will be issued with the proper
tax forms and be responsible for fulfilling the tax obligations on their
baskets.
In September 2006, the HFPA voted to discontinue the
practice of thanking presenters with lavish gift boxes, and no baskets were
distributed at the 2007 Golden Globe Awards held in January at the Beverly
Hilton Hotel in Beverly Hills,
California.
Last year’s Golden Globe goodie bags, however, were
worth upwards of $20,000 each and contained, according to the Associated
Press, a $1,200 diamond pendant, a $2,000 gym membership, a $865 Chopard
watch, a $745 camera phone and an array of handbags, expensive clothing,
jewelry, MP3 players and gift certificates.
Other more extravagant and exclusive giveaways included cruises and
trips around the world.
Thanking celebrities with gift bags has been an
established Hollywood ritual since at
least the early 1970s.
The Academy
of Television Arts
and Sciences has come to an agreement with the IRS to notify them about
when a gift bag is taken and its value.
The IRS’ main goals in its outreach campaign are to “focus attention
on tax guidelines for gift bags and other promotional items” and to ramp up
reporting compliance through the completion of 1099 forms, which are used
to report income other than wages.
According to an IRS spokesman, they are not looking to “put an end
to celebrity gifts.” According to
the IRS, “All we want to do is make sure the organizations and the
recipients understand their tax responsibilities.”
Taxes that
were self prepared and filed electronically increased 8.4% for 2007
Individual Returns 2006 2007 % Change
Total Receipts 87,732,000 88,581,000 1.00%
Total Processed 82,747,000 84,215,000 1.80%
E-filing Receipts:
TOTAL 57,740,000 61,345,000 6.20%
Tax Professionals 41,939,000 44,210,000 5.40%
Self-prepared 15,801,000 17,135,000 8.40%
Average refund $2,290 $2,366 3.30%
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