Entertainment

Why Isn’t the IRS Taxing Celebs for Freebies Like Sports Tickets?

A few years back the IRS realized that celebrity gift bags handed out at Awards Show (Oscars, Emmys, Grammys, etc.) were really untaxed compensation, so they started 1099-ing those bold-faced names for the goodies they grabbed as they hoofed it up the red carpet.

This was the statement from the government’s own website on ‘the day the goodie bag died.’

March 3, 2006

WASHINGTON – The Commissioner of the Internal Revenue Service today wished the Academy Award nominees the best of luck at Sunday’s presentation, but he reminded celebrity recipients of the six-figure goodie bags that they qualify as taxable income and must be reported on tax returns.

“As the world watches the glamour and glitz of the Academy Awards, it’s important to keep in mind that movie stars face the same tax obligations as ordinary Americans,” said IRS Commissioner Mark W. Everson. “We want to make sure the stars ‘walk the line’ when it comes to these goodie bags.”

Handing out of celebrity gift bags and goodie bags has become increasingly commonplace. News reports about the “official” Oscar gifts that will be given to stars place the value at more than $100,000.

“This has become big business for companies promoting their products. These things aren’t given without pride and prejudice. There is a tax implication for them. We just want to make sure no one crashes into the tax code,” Everson said.

But ‘goodie bags’ are not the only perk regularly offered to celebrities. What about tickets to sporting events where those bold-faced names are so often seen mugging for the cameras during time outs?

The New York Post reports that Madison Square Garden admittedly reserves more than twenty of primo these seats for famous faces. But MSG doesn’t sell those seats to celebs, they give them away. Courtside seats at the NY Knicks games have a price tag of $3000 each (next season that price increases to $3600 per game).

Why Isnt the IRS Taxing Celebs for Freebies Like Sports Tickets?

MSG guests Andy Samberg, Regis Philbin, and Adam Horovitz - courtside at a Knicks game

Stars sitting courtside at NBA games adds to a team’s entertainment street cred. It’s marketing and promotion for the team, kind of like paying for a celebrity endorsement. So why aren‘t tickets to games considered taxable income like ’goodie bags?’

Considering the total dollar amount, this may be a source for substantial tax revenue.

20 seats x $3000 = $60,000 taxable dollar value per game x 46 home games per team = $2,760,000

Based on just the New York Knicks and those twenty seats per game, the IRS is missing out on approximately $966,000 in federal income tax annually. NY State and the city may also be interested in getting their slice of the pie here.  Additionally, cities like Los Angeles, Chicago, and Miami might also offer considerable tax revenue from the courtside courtesy tickets they provide in exchange for celebrity good will.

And that’s just the NBA.

Comments (44)

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  • mytwocents
    Posted on April 18, 2011 at 3:30pm

    I wish I got a nickle for every time the word fair is used till the next election and a quarter for the use of unfair. Sounds fair to me.

    Report Post »  
  • salemslights
    Posted on April 18, 2011 at 3:13pm

    Their in with the nwo their job it keep people hooked on tv to keep them dumb down. the schools keep the kids dumd down.

    Report Post »  
  • Bhaub
    Posted on April 18, 2011 at 12:36pm

    You can’t tax them! They’re wealthy, so that’s CLASS WARFARE. They shouldn’t have to give any more than anyone else. Fox News has made it clear that raising taxes is bad. Taxes are bad. Everyone here at The Blaze knows that.

    I’m going to pray that these people never have to pay taxes on their wealth.

    Report Post » Bhaub  
  • UlyssesP
    Posted on April 18, 2011 at 12:28pm

    If they want the perks that come with getting paid to be narcissistic, then let the IRS give them the attention the crave as well. The more fans the merrier.

    Report Post » UlyssesP  
  • HTuttle
    Posted on April 18, 2011 at 11:34am

    Why isn’t the IRS demanding that EVERYONE declare vacation, sick pay, health benefits, etc. as INCOME? (including themselves)

    The self-employed sure have to.

    Report Post »  
  • The Gooch
    Posted on April 18, 2011 at 10:24am

    L-A-W-Y-E-R-S
    It’s good to be king and make all the rules. This is not real hard to figure out, folks.

    Report Post »  
  • Tyr
    Posted on April 18, 2011 at 9:40am

    Want to stop the Feds from spending? Two words. “Tax Revolt”. 100 million citizens who now pay the top tax rate refuse to pay. Wow, civil disobedience! What a concept!. (now i’ll just sit here and wait for the black SUVs to show up in front of my house).

    Report Post » Tyr  
  • dadsrootbeer
    Posted on April 18, 2011 at 9:33am

    Just another reason to spend your time doing things with your family or charity work rather than supporting entertainment elites. As Howard Stern once said, “anybody can act, it’s not hard”.

    Report Post » dadsrootbeer  
  • SandyfromChesterfield
    Posted on April 18, 2011 at 9:22am

    Does obama pay for his tickets to basketball games? Just wondering…..

    Report Post »  
  • awizard
    Posted on April 18, 2011 at 9:17am

    These are the very folks “the left” imagine when they say “Tax the Rich”, yet they don’t hit these people (most are supporters) … if you are a celeb./ politiction and “given” a ticket to a pro[anything] game, or “gift” for showing up , you are Working and it should be considered payment for services rendered and taxed(at retail value) … On the same subject(sort of), if you make 100+ Million $’s a year for PLAYING A GAME?.. or MAKING A MOVIE?.. I‘d think you’d gladly give half of of it to the government in appreciation for maintaining an environment that allows you to do that …

    On the flip side, our “leaders” do not seem to be able to distinguish between these folks and the guy that works his a$$ off for Forty + Years to build a business, Builds a hundred million dollar inventory, Two hundred million dollar plant, Eight million in sales, employs a Thousand + people(“most” of them have to be trained, in Simple stuff, like Math, basic mechanics?)… and lives on a margin of Four % … (oh, and I almost forgot, ‘works 80 + hours a week, 52 wks/year ‘hasn’t taken a “vacation” in @ least 10 years) … That’s my last “Boss”, and I’ve seen a Hundred like him over the years …

    kerry’s “Winners in life’s lottery” … obama’s “The fortunate among us” … Tax “Them” at a 90%, rate, if you wish (less “entertainment” and “more work” might be better anyway) … Do they not “See” are they truly “blind” to what life’s about?..

    I’ll end it here with this; I have no problem with “The Fortunate few” reaping their rewards but, why do you want to punish the “Many” who have worked hard and “only ” attained “Modest” success.

    I apologize for my lack of Eloquence, bad puncuation, and wandering off this thread But dam^ these folks don’t live in the same world as me … “you REALLY want to be an ”actor”?..

    Report Post » awizard  
  • WHITE LOTUS2x
    Posted on April 18, 2011 at 8:25am

    This is the first time I can remember thinking that the money I sent the IRS this year is going to be wasted. Splurged along with everyone elses on anything to get it spent and dig the whle deeper too while they are at it. Lotus.

    Report Post »  
  • justice
    Posted on April 18, 2011 at 8:17am

    Only the Elite will survive. They of course give their generous champaign money to the Dem-Rats.

    Report Post »  
  • Dahart
    Posted on April 18, 2011 at 8:16am

    Ok …if we the little people would have pay the tax, then so should celebrites. On the other hand can just not receive a gift anymore….are they going to start taxing Christmas gifts or BIrthday gifts?

    Report Post » Dahart  
  • LadyIzShy
    Posted on April 18, 2011 at 7:34am

    we need to do away with the current tax codes. go to a simple flat tax or something like it and count ALL income give NO credits and we would be on top of the world if we could get congress to stop wasting our money

    Report Post » LadyIzShy  
    • GhostOfJefferson
      Posted on April 18, 2011 at 8:54am

      A flat tax isn’t the answer. Abolish the income tax, replace it with nothing. Force government to only spend on items specifically authorized by the Constitution, and we’d STILL be running a huge surplus in that kind of scenario. Income taxes, whether flat or progressive or other, serve only to allow the government free reign over our labor and allows them more loot to go out and start trouble with. Why people think we need *any* income tax is beyond me, other than simply having bought the progressive lies that declare that without an income tax we’d have no money at all. Clearly a falsehood.

      Report Post » GhostOfJefferson  
    • wildbill_b
      Posted on April 18, 2011 at 8:23pm

      Better yet GhostOfJefferson, how about everyone learn the law, discover it does not apply to them and force the proper application of it as a Corporation tax like it is supposed to be.

      Force the government to obey the law and use the 16th to tax bonds like it is suppose to be.

      This is ALL a matter of history easily confirmed by anyone who bothers to check.

      Report Post »  
  • Taxpayer550
    Posted on April 18, 2011 at 7:23am

    It’s only fair that the “most fortunate” of us like Paul McCartney, Jamie Foxx, Bill Cosby, etc. are taxed for these bennies. Right, Obama?

    Report Post » Taxpayer550  
  • bhelmet
    Posted on April 18, 2011 at 7:14am

    Celebrities aren‘t even part of the left’s demonized rich – and they make FAR more than CEO’s. So long as you Dems, it is OK. Funny thing is, how many of these celebs demonize wealth and the system that grants access to it?

    Report Post » bhelmet  
  • 1776Patriot
    Posted on April 18, 2011 at 7:13am

    My dad is a retired pro sports referee, they used to get 2 tix per game they worked, it was simply part of their contract and it let families go see their loved ones work. Well, the wonderful IRS decided that the tix‘s were income and started auditing the referee’s bc of how many tix they got throughout a season. If my dad had to be taxed, then by gosh the celebs can be too!

    As an aside, ABOLISH THE IRS AND GO TO A FLAT TAX + CONSUMER TAX! Repeal the income tax amendment!

    Report Post »  
    • Rainmom
      Posted on April 18, 2011 at 8:50am

      I agree with both counts. Seems to me there has been a crack down on tips earned in service industries for years. It is power to deliver these tickets to these celebs and all power corrupts. I don‘t think letting a ref’s kids get to see him or her at work equates with getting a political or celeb endorsement and yet that was taxed. We need to scrap the IRS and flat tax.

      Report Post » Rainmom  
    • wildbill_b
      Posted on April 18, 2011 at 8:21pm

      The reason they are pushing for a flat tax is because Constitutionally and LAWFULLY “income” is only “unearned” money. They are losing control of the make believe tax system you know and want to manipulate you into voting them the authority to tax your pay for labor. If you do that you screw yourselves. Learn the Law. Stop believing the liars that call themselves the IRS. There is NO SUCH THING. No such government agency exists. Every single letter they send through the mail is Fraud.

      The actual agency that is enforcing the laws on you is BATF. Try to find where Congress created an Agency called the “IRS”. Good luck. I have read every single page of Statutes at large from 1862 (income tax first imposed by Lincoln) to present. No such agency exists. Further more Title 26 section 7851(f) tells us that the actually law they are imposing on you is the Public Salary Act of 1939. Are you a public servant? If not is definitely does not apply to you. The Tax code of 1954 and 1986 were NOT enacted (because Congress KNOWS it is UnConstitutional to impose it on NON Federal employees) and are merely to make a few changes to the 1939 code.

      Report Post »  
  • boonerdan
    Posted on April 18, 2011 at 7:09am

    And these are the same celebrities that tell us that communism is great and we should all be paying “our fair share”. Thus endeth the lesson.

    Report Post »  
  • wildbill_b
    Posted on April 18, 2011 at 7:07am

    Perhaps instead of asking why they didn’t include the “Grab bag” you should ask yourself what Constitutional authority to tax YOUR pay for labor is. If you claim the “16th” amendment as the IRS does then you are deluded as they are. :) History doesn’t change. Only its presentation changes.
    The Income Tax Code is a excise tax on corporations and NOTHING more.

    The “16th” was passed to allow an excise tax on bond income and absolutely nothing else.

    This is a simple matter of history.
    “”

    Another criticism of the corporation tax in the present bill is that only shares of stock in the corporation interprises (sic) are thus taxed, and that those who own bonds secured by mortgage upon the entire property or plant of the corporation, do not pay any tax at all.

    This is true , and the defect was fully recognized by those who drafted the corporation tax. They would have been glad if possible to impose a tax upon the bondholders who are only less interested in the earnings and success of the corporation before the payment of interest on the bonds, an income tax proportioned to a percentage of the interest to be paid on the bonds, was that Congress could not authorize a corporation to recoup itself in the payment of such a tax from interest to be paid, because thus to impose a tax on the bondholder proportioned to the interest he received would be in violation of the Constitution as interpreted by the Supreme Court (Pollock), as an income tax not apportioned among the States.

    Now, if the proposed amendment to the Constitution authorizing the imposition of an income tax without apportioning it among the States according to population [16th]passes, it will be possible to add to our corporation tax the feature of imposing a tax on the bonded interest in the corporation by a percentage tax upon the interest to by paid , thus reducing the amount of interest which the corporation would pay to the bondholder to the extent of the tax collected.”"

    http://ia700104.us.archive.org/18/items/presidentialaddr00unit/presidentialaddr00unit.pdf
    http://www.presidency.ucsb.edu/william_howard_taft.php

    Report Post »  
  • neiman1
    Posted on April 18, 2011 at 6:56am

    It could include politicians lining the seats. LA Mayor Villagiarosa just paid fines to the Calif. Election Commission for not reporting free tickets to events on his campaign forms. The IRS doesn’t even have to investigate here. Just take the commission report and compare it to his tax return and collect the taxes and penalties as well.

    Report Post »  
    • Dale
      Posted on April 18, 2011 at 9:51am

      neiman1

      “and penalties as well.” Surely you jest. 1) he’s a politician, and 2) he’s a lib/progressive.

      Report Post » Dale  
  • teachermitch32
    Posted on April 18, 2011 at 6:54am

    I am sure that every prize won (cash or otherwise) by Mr. or Mrs. JQ Public on a game show is taxed. Why wouldn’t a prize, gift, etc. for a celeb be taxed? It’s only fair. Most of them are libs anyway, and raising taxes is their montra for solving the debt. Let them be the first to make a dent in the debt.

    I can’t remember the last time I won anything of value or was given a gift bag worth more than $1.50 anyway.

    Report Post »  
    • Dale
      Posted on April 18, 2011 at 9:49am

      Mitch;

      Did you consider that when celebs win (and regis’s picture reminds me) on ‘millionaire’ for charities, the show gets a tax write-off, and (I’m not an accountant) I believe, since the amount won is donated in the celeb’s name, they too get a write-off. Why do you think they appear on these shows.

      Report Post » Dale  
    • keepthefaith
      Posted on April 18, 2011 at 11:09am

      If my husband receives anything of value from his place of employment we are taxed on it. I am not talking about his paycheck, I am talking about rewards…gift cards, sports tickets, even our Thanksgiving turkey. We can’t get away with it. The celebs shouldn’t be able to either. They take it right out of our paycheck. We have no choice.

      Report Post » keepthefaith  
  • Mannax
    Posted on April 18, 2011 at 6:44am

    As much as I hate the IRS and our current tax code, if the celebs are getting goods and services for free that would be considered income then they should have to pay the taxes on it. I am sure that we “common folk” would not be able to get away with it.

    Report Post »  
  • Dan
    Posted on April 18, 2011 at 6:43am

    We wouldn’t want the IRS to give themselves a bad name with any such exposure. Squeezing us for the dough doesn’t make the headlines.

    Report Post »  
  • toolmanss109
    Posted on April 18, 2011 at 6:42am

    Silly question, Comrade. High Party officials do not pay taxes. Have you paid yours? Remember, in the Soviet Union, everyone is looking for a party. In America, the Party finds you.

    –“Ask Boris”

    Report Post »  
    • GhostOfJefferson
      Posted on April 18, 2011 at 8:50am

      There used to be an America, hard as it is to believe, that once upon a time didn’t have an agency tasked by the government with sucking out our means of subsistence as if it had first claim on our labor, and an agency that was not out creating class warfare and jealousy on a full time basis. This was known as the free period in American history.

      It shouldn’t be “well…we’d have to pay“ it should rather be ”well…we shouldn’t have to pay either, nobody should!”.

      Report Post » GhostOfJefferson  
  • nostromo
    Posted on April 18, 2011 at 6:41am

    And the Dems wanted to have Republican reps who stayed in their offices declare as income the value of those lodgings.

    Report Post »  
    • Professional Infidel
      Posted on April 18, 2011 at 8:53am

      I’m almost ready to take my chances in mexico.

      Report Post »  
    • RightWrite
      Posted on April 18, 2011 at 10:25am

      What about the cars, hotel rooms, meals, clothing and everything else they get for free for promotional purposes?

      Report Post » RightWrite  
    • independentvoteril
      Posted on April 18, 2011 at 11:20am

      Isn’t it funny the POLITICIANS and CELEB.. can get all this FREE STUFF but if you get a winning lotto ticket they want you to declare even a dollar on your taxes..

      Report Post » independentvoteril  
    • roachesneverdie
      Posted on April 18, 2011 at 12:39pm

      Eliminate the “income tax” and have a flat fed sales tax of 15%, everyone pays their fair share, the more you spend, the more tax you pay, the poor don‘t spend much so they won’t pay much. How much fairer could it get? And how much simpler could the tax code be? The gov’t would be forced to meet the balanced budget and cap at 15% so it would need to shrink to meet that level of revenue. The IRS workers would become collectors with their focus on collecting from State agencies. Yeah, too many people who get some sort of benefit from a “tax break” or a kickback would be the most vocal well-heard group of lobbiests and it will never happen, I know I know, but I can still dream can’t I?

      Report Post »  
    • Non_Probate_Asset
      Posted on April 18, 2011 at 1:44pm

      @Roaches.

      You are just wrong about this. A flat tax is a regressive tax. If a person making 10,000/year has to pay 15% of their income to the government, then the government is just taking money out of that person’s pockets that would otherwise be used on necessities (food, clothing, shelter, etc…). If the government takes 15% of the income of a person making 1,000,000/year, virtually all of those tax dollars would otherwise be spent on unnecessary items, and all of that person’s necessities would still be well provided for. So, with a flat tax, the poor must give up money they need to live, while the rich give up money they can very easily go without. That doesn’t seem to fair, does it?

      Report Post »  
    • AMERICAN FOREVER FOREVER AMERICAN
      Posted on April 18, 2011 at 2:26pm

      @Non_Probate_Asset
      Somehow it makes sense to you that so many should get a free pass. Isn‘t it a little revealing that those in favor of taxing the rich don’t pay payroll taxes to begin with? I have been working since I was 10. I started as a substitute paper boy. As a Civil Engineer I make nowhere near $250,000 a year and as a matter of fact my pay has been reduced by 50% since the recession started. I can’t begin to imagine not paying my share nor can I imagine not taking care of my own. Certainly there are times that we need a safety net for those that have fallen on hard times but it has become more like a hammock.

      Report Post »  
    • wildbill_b
      Posted on April 18, 2011 at 8:09pm

      @AMERICAN FOREVER FOREVER AMERICAN

      A few points of factual information to dispel your superstitious beliefs, although no fault of your own.

      1. There is NO law requiring you to pay “income” tax on the money you personally earn.
      2. You pay your share by consumption taxation. This has been the case for ever. The Federal income tax is EXACTLY what the name says. An Excise tax on “unearned” money (income) derived FROM the Federal Government.
      3. The 16th amendment is PRIVATE law having effect on only the Federal Government.

      There is a great deal of historical information that you can read if you chuse to do so such as the following.

      Senator Cox, among many others was one of the Congressmen who debated on the “Income Tax” and the 16th amendment. Here is what they knew in that day but is forgotten today.

      “The Idea that men like Carnegie, now the holder of more than $300,000,000 worth of the bonds of the United States Steel trust, escape federal taxation is indeed absurd… and then to realize that all these enormous fortunes are escaping their just and proportionate share of taxation while the people themselves are staggering under our present system of indirect taxation, it is no wonder to me they cry relief.”

      And as for the 16th amendment here is what the intent of it was from President Taft himself:

      William H. Taft Speech
      (Auditorium, Denver, Col., September 21, 1909.)
      Pg. 245
      “Now, if the proposed amendment to the Constitution authorizing the imposition of an income tax without apportioning it among the States according to population [16th]passes, it will be possible to add to our corporation tax the feature of imposing a tax on the bonded interest in the corporation by a percentage tax upon the interest to by paid , thus reducing the amount of interest which the corporation would pay to the bondholder to the extent of the tax collected.”

      Thus we see that ALL “income” taxation is CORPORATION taxation. This is because the Constitution specifically DENIES the Federal Government the ability to reach into your pocket PERIOD.

      You pay “excise” tax on every single penny you spend. THAT is your “share” of taxation to support this country.

      and lastly the 16th amendment itself proves all of this. Philander Knox’s Certification of the 16th is found in 37 Stat. 1785. This is Part-2 Private acts and Resolutions.

      You, as most Americans have been intentionally taught a lie to get you to “voluntarily” sign up for taxation. The Tax Code is quite clear about this fact at Title 26 section 3402(p).

      So ask yourself why you have NEVER bothered to read the Law and learn if it applies to you or not? It is your Constitutional Duty after all. :)

      Do you realize that you hold dual Citizenship? Simply look the word up in a legal dictionary and you will find that “US citizens” hold dual citizenship. They are American Citizens AND US citizens.

      American Citizens inhabit the “republican” states of the Union. US citizens on the other hand are Federal Subjects who are “Residents (aliens)” in the Republic States.
      United States of America= 50 states of the Union
      United States=D.C., Virgin Islands,Guam, American Samoa, Puerto Rico.

      Which one do you live in?

      Resident:
      1. Dwelling in a particular place; residing: resident aliens.
      2. Living somewhere in connection with duty or work.
      http://www.thefreedictionary.com/resident

      Report Post »  
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