Taxing times for Oscar celebs

WASHINGTON, DC: And you thought the stars who beam down upon the Oscars as presenters, winners and performers do it for free. Well, they don’t, and the Internal Revenue Service — the US equivalent of India’s Income Tax Department — has decided to hand out its dreaded 1099 form and ask them to declare the goodies they receive as income.

Every presenter at the Oscar ceremony — one of the world’s most-watched live events — gets a goodie bag each year that contains expensive gifts such as Hawaiian holidays, premium coffee machines, jewellery, Apple iPods, laser eye surgery vouchers, even super-premium lingerie. The total value of these gifts at the 2005-06 edition of the awards held in March this year was approximately $100,000 (Rs45 lakh).

There ceremony saw 200 presenters, winners and performers, and unconfirmed reports in the US media say that the taxable non-cash income was $20 million. For three consecutive years - 2003 to 2005 - the gift value was almost the same at $100,000. This would mean that the stars received a total taxable non-cash income of $60 million (approximately Rs270 crore).

IRS Commissioner Mark Everson was as dramatic is his media statement. “There’s no special red-carpet tax loophole for the stars,” he said. “Whether you’re popping the popcorn, sitting in the audience or starring on the big screen, you need to respect the law and pay your taxes.” Instead of taking on the IRS, the Academy of Motion Picture Arts and Sciences (AMPAS), which organises the Oscar ceremony every March, has decided to stop giving away goodie bags. In a related decision, the AMPAS will also hand over tax forms to all those who received goodie bags at this year’s ceremony.

Not all of the stars made use of the goodie bags. George Clooney, who had two nominations and one victory as the best supporting actor for Syriana, donated his goodie bag to The United Way, a non-profit, which later auctioned it to raise money for Hurricane Katrina victims.

The IRS’ next target is the Emmys, the television equivalent of the Oscars, organised by the Academy of Television Arts and Sciences, which will be held this Sunday. According to a report in the New York Times, an Emmys spokesperson said “it was premature” to consider whether the television academy would discontinue its gift giving to presenters. The report also said: “But in a letter currently being sent to presenters at this year’s Emmy ceremony, the academy is reminding recipients of their tax obligations. Presenters will receive their gift baskets only if they send back a signed copy of the letter.”