The Swag Loophole, Filled

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Okay, so the Golden Globes may be happening tonight, and the ladies may be dripping in diamonds, but they won’t be marching home with swag, not like yesteryear. Turns out that freebie goodies doled out to presenters at awards’ shows (last year’s Globes’ offerings were worth $40,000) caught the attention of the IRS, and the Globes, Oscar and Emmy are all having to pay up.

Last week the Globes’ Hollywood Foreign Press Association announced that they would forego the basket distro altogether (instead giving each attendee $600 worth of gifts). The announcement came soon after they agreed to pay all back taxes on the gifts handed out until 2005 and provide celebrities who received goodies in 2006 with the appropriate income tax forms (that’s gonna be an awkward handoff). No word on how much loot the IRS collected from the Globes, but it was likely enough to outfit Scarlett underwear to earrings in Harry Winston.

The swag loophole fails thusly: vendors write off the items as the cost of doing business, fine, but A-listers technically receive the “gifts” in exchange for appearing at an event—thus they’re taxable income.

In August the Academy of Motion Picture Arts & Sciences’ settled up with the IRS for past swag ($1.2 million for 2005 alone) and said it would no longer shower Oscar presenters with loot that ranges from perfume to cruise tickets to Antarctica. And last year’s Emmy presenters got a letter along with their $33,000 swag bags explaining the ensuing tax obligations.

Last summer Clara pointed out the swag-bag trend in her coverage of the perks of privilege (along with a whole lot of other ways the rich stay that way). One for the irony stack:

For performing in the Live 8 concerts to “make poverty history,” musicians each got gift bags worth up to $12,000.

Read the rest of Clara’s picks here, with sources here.

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Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

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We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

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Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

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