When I was child and invited to a birthday party, I almost always left with a bag of goodies, usually candy, maybe a lollipop, some chocolate bars, sour balls, and probably a piece of licorice.
Not much of a goodie bag when you compare it to the goodie bags given out to many of the celebrities attending the last Oscar presentation. It was reported, among other things, that their goodie bag contained a four-night stay at expensive hotel in Hawaii with 24-hour butler service and spa treatment, an Internet telephone system, an espresso machine, a video iPod, a digital camera, that all-important leather-trimmed cashmere travel blanket, and a dinner party at a steakhouse.
The IRS is finally taking notice and looking upon those and similar goodie bags as payments for the stars' services. One newspaper reported last week that those who appear but fail to win at the Emmy television awards were expected to receive compensatory gifts worth up to $42,000.
In negotiation for some time, the American Academy of Motion Picture Arts and Sciences, which awards the Oscars, and the IRS announced a closing agreement has been reached settling the recipients' tax obligations with respect to gifts given through 2005 (the Academy is picking up the tab).
IRS is also putting all others on notice that along with some goodie bags, the recipients might also be required to get a 1099 so the value of the contents of the bag can be included in their income.
Somehow, I don't think this will be the last that we hear about goodie bags. Maybe the stars will start negotiating what goes into those goodie bags, excluding that leather-trimmed cashmere travel blanket, but keeping the iPod. I also wonder what kind of questions the stars' accountants will be asked.
