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Pepperdine University School of Law

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Friday, April 22, 2005

Oprah's Tax Problems Redux: Can 5k Checks to 100 Employees Be Treated as Gifts Rather Than as Income?

Oprah_5Last year, we shamelessly blogged the tax consequences of Oprah Winfrey's giveaway of 276 new Pontiac G-6s to her studio audience in celebration of the 19th season of her talk show (see here, here, and here), culminating in Jon Stewart's hilarious spoof on The Daily Show).

With Tax Profs now in full exam prep mode and desperately looking for diversions, Howard Chapman (Chicago-Kent) sparked a spirited discussion on the TaxProf Discussion List yesterday when he recounted media reports that at an April 10 party celebrating O, The Oprah Magazine's 5th anniversary, Oprah gave $5,000 personal checks to 100 employees. The media reports note that having learned from the Pontiac episode, she wanted the employees to net $5,000 so she wrote the checks from her personal account:

Oprah told her grateful underlings: "I figured I would give you five things you could really use." Best of all, the bonuses were tax-free.

According to an interview on Good Morning America, it appears that Oprah's tax position is based on treating the payments as gifts within the 11k annual exclusion.  But there appears to be no authority for treating the payments as non-taxable gifts rather than as taxable compensation.

http://taxprof.typepad.com/taxprof_blog/2005/04/oprahs_tax_prob.html

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Listed below are links to weblogs that reference Oprah's Tax Problems Redux: Can 5k Checks to 100 Employees Be Treated as Gifts Rather Than as Income?:

» Oprah's Tax Problems Redux from A Taxing Blog
Paul Caron reports that Oprah may be in need of a remedial federal income tax class. [Read More]

Tracked on Apr 22, 2005 7:40:26 PM

» Oprah and the Employee "Gifts" from Death and Taxes - The Blog
TaxProf Blog has an interesting note about Oprah Winfrey's recent decision to pay $5,000 to 100 employees of her magazine, in celebration of the magazine's fifth anniversary. [Read More]

Tracked on Apr 25, 2005 8:48:50 AM

» Oprah and the Employee "Gifts" from Death and Taxes - The Blog
TaxProf Blog has an interesting note about Oprah Winfrey's recent decision to pay $5,000 to 100 employees of her magazine, in celebration of the magazine's fifth anniversary. [Read More]

Tracked on Apr 28, 2005 9:54:05 AM