IRS at the Oscars

Interesting article on Bloomberg in anticipation of the Oscars on Sunday night: IRS Reminds Celebrities That Oscar Gift Bags Are Taxable Income, by Ryan J. Donmoyer:

The IRS today warned Academy Awards performers and presenters that the gift bags handed out during Sunday's televised ceremony -- valued in some estimates at more than $100,000 -- are taxable income.

"We want to make sure the stars `walk the line' when it comes to these goodie bags," IRS Commissioner Mark Everson said, referring to an Oscar-nominated film about the late country singer Johnny Cash.

The Chicago Sun-Times reported Feb. 27 that in lieu of cash payments, the show's performers and presenters receive bags stuffed with cell phones and vouchers for massages, dinners and vacations, including a four-night stay in the Vera Wang suite of Honolulu's Halekulani Hotel valued at $25,000 [See Bill Zwecker, What's In This Year's Oscar Goodie Bag?:  "The overall value of the 2006 "gift bag" is estimated to surpass $100,000."]

A gift bag valued at $100,000 would result in about $45,000 in federal and state taxes for a California resident in the top tax brackets.

For prior TaxProf Blog coverage of the tax consequences of Oscar swag, see here and here.

Update:  More press coverage:

• L.A. Times
• New York Times