The Internal Revenue Service announced an agreement yesterday with the Academy of Motion Picture Arts & Sciences resolving outstanding tax responsibilities with respect to Academy Awards gift baskets.
The agreement marks the beginning of an IRS effort to reach out to the entertainment industry with reminders that award show gifts and promotional giveaways are considered taxable income. The practice of thanking presenter and performers has escalated to the point that the gift basket for the 2006 Oscar awards has been estimated at $100,000.
Now you may ask what does this have to do with retirement plans? Actually, nothing. But it is a good example of the Two Part Theory of Political Economics ascribed to Nobel winning economist Milton Friedman. Part one of which is “Them what has gets”.
The Tax Prof Blog has a post that links to releases issued by both the IRS and the Academy and press coverage.
The Second Part of the Theory? “Ain’t no free lunch”.