Oscar night is the biggest night in Hollywood. The stars shine just a little bit brighter. The red carpets stretch just a little bit farther. And the bloated egos get just a little bit bloatier, if that’s possible. (Here’s looking at you, Bradley Cooper.) Ironically, fewer and fewer of us tune in to the actual ceremony. Why give up hours of your life watching celebrities congratulate each other when you could fit a couple of full-length movies in the same length of time?
Of course, calling the bag a “gift” doesn’t actually make it a gift. That’s where the IRS comes in. The tax code defines a gift as something you get out of affection or respect. And while the Avaton Luxury Villas Resort in Greece may have really liked watching Christian Bale retreat to an undisclosed location in Vice, the real reason they’re comping him a week at the beach is to attract new guests. So . . . the swag bag is taxable income. In fact, Distinctive Assets even sends the nominee a Form 1099 reminding them to report it!
In 1984, the documentary filmmaker Marty Di Bergi scored a hit with This is Spinal Tap, a look inside Britain’s loudest band and their 1982 Smell the Glove concert tour. Lead singer David St. Hubbins, lead guitarist Nigel Tufnel, and bassist Derek Smalls, were joined by a series of drummers who died under mysterious circumstances, including spontaneous combustion and a bizarre gardening accident that authorities said was “best left unsolved.”
Of course, the whole thing was a spoof. “Marty Di Bergi” was really director Rob Reiner, and the band members were played by actors Michael McKean, Christopher Guest, and Harry Shearer. (Having said that, they really did play their own instruments — and yes, they really did turn the volume up to 11.)
This is Spinal Tap cost just $2.5 million to make. But it has become a cult classic, and grossed countless millions in ticket sales, home video sales and rentals, merchandising, and foreign rights. The four co-creators signed contracts giving them 40% of the movie’s back-end profits, 50% of the the music receipts, and 5% of the merchandising. Yet they report getting just $179 in total income from 1984 to 2006. Now Harry Shearer, backed by the heavy duty millions he made voicing characters for The Simpsons, has spearheaded a $400 million lawsuit against the movie’s owner, the French conglomerate Vivendi. And that got us wondering . . . do the fans at IRS have a stake in this particular fight?
United Airlines depends on internet technology as much any big business — the days of friendly travel agents patiently walking you through route choices are long gone. So back in May, they took advantage of a clever strategy for avoiding the sorts of attacks that make the skies less friendly. They call it the “Bug Bounty Program,” and it pays “white knight” hackers to find the flaws in their system before the bad guys do. Last month, the airline paid two hackers a million “MileagePlus” points each for finding and documenting major flaws related to remote code execution (whatever that is).
A million miles is literally enough to fly to the Moon and back twice, if you don’t mind cramped seats, surly gate agents, $15 snacks, and changing planes in Newark. (Can you imagine flying to the Moon in a middle seat? How much would they charge to check a bag?) But back here on earth, what do our friends at the IRS think of the Bug Bounty program?
Every year, the IRS Criminal Investigations unit releases a surprisingly entertaining report detailing their efforts to protect the Treasury from scammers, fraudsters, and cheats. This year’s edition reveals that, due to budget cuts, activity is actually down. There were 3,272 indictments and 3,110 convictions, which shows the IRS won’t take you to criminal court unless they’re pretty sure they can really nail you to the wall. And 80% of those who were convicted won themselves an all-expense paid trip to a federal penitentiary.
Last week, New York Yankee shortstop and future Hall-of-Famer Derek Jeter played his last Major League Baseball game. He chopped a single to third in the third inning to drive in a run, then took himself out for good. That …Continue reading →
Silicon Valley’s high-tech employers are famous for feeding their employees at work. It’s not entirely selfless — feeding people helps attract talented workers and keep them chained to their desks. At this point, it’s no longer a novelty — it’s …Continue reading →
Laura M. Mikeworth, CPA PA.
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