Tax

Hollywood Empties Its Gift Baskets

Actors Steve Carell and Eva Longoria won’t have to check their mailboxes for Golden Globe Award presenter gift boxes this year. That’s because the ...
Marie LeoneJanuary 10, 2007

Actors Steve Carell and Eva Longoria won’t have to check their mailboxes for Golden Globe Award presenter gift boxes this year. That’s because the Hollywood Foreign Press Association (HFPA), which sponsors the Golden Globe Awards and had made a habit of sending lavish gift boxes to award presenters, won’t be sending out gifts this year.

On Wednesday, the Internal Revenue Service and HFPA agreed to resolve outstanding tax questions regarding the extravagant gifts. In addition to a formal agreement, HFPA has also decided to stop sending the presenter boxes, which often are stuffed with more than $100,000 worth of goodies. Late last year, The National Academy of Arts and Sciences, the organization that sponsors the Oscar Awards, announced that it would stopped giving gift baskets to celebrities.

Last year, the HFPA voluntarily approached the IRS to clarify tax issues related to presenter gifts, as well as to ensure that any obligations for the prior years were met. As a result, HFPA has settled all tax obligations through 2005, and plans to issue appropriate tax forms to recipients of the 2006 boxes. Luckily for HFPA, it resolved old tax issues without asking celebrities to foot the tax bill for the extravagant gifts.

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“We are pleased to have reached an agreement with the IRS,” said HFPA President Philip Berk in a statement. “We thought it only proper that we assume the tax burden for 2004 and 2005; we felt it didn’t seem fair to ask those who had donated their services to pay additional tax after they had already filed tax returns for those years.”

In August, the IRS started an outreach campaign within the entertainment industry that targeted celebrity gift bags and presenter boxes sent out in conjunction with award shows and other star-studded gathering. The bags and boxes can include certificates for luxury trips, jewelry, and electronics. The program focused on two main areas: Reporting compliance by the stars and other recipients; and completion of Form 1099s as appropriate by the gift givers.

“The fact this gift bag practice grew so quickly is stranger than fiction,” added Everson. “We’re happy the Hollywood Foreign Press Association stepped forward to resolve this issue.”