Swag Hosts Aware of I.R.S. Rules, But So What?

February 22, 2007, 12:00 AM EST

We surveyed some of the organizers of gift-giving events around town, and their responses were unanimous to the question of whether the Internal Revenue Service’s new interest in enforcing tax on swag was changing the nature of their events: It’s not. Not significantly, anyway. People are aware of the I.R.S.’s increased interest but overwhelmingly continue to leave the onus on their guests to report the gifts they pick up.

The Haven gift house in Beverly Hills, which is hosting swag events by day and parties by night this week, has a laminated sign prominently displayed at the check-in table. It reads, in part: “Please be advised that the Internal Revenue Service has taken the position that the value of the merchandise that you receive from companies participating in this gifting suite should be reported as taxable income on your U.S. federal income tax return.” Once inside, guests are on their own to take—and later to report or not report—what they please.

Christina Martin, who works with Equity Strategic Relations, which produces a three-day-long series of gift-giving events at a Beverly Hills home, takes the same tack. “No, [the I.R.S.] hasn’t changed things at all,” she says. “We report everything, and it’s up to the [visitors to the house] to do what they do.”

Marisa de Saracho, PR and marketing rep for Sonya Dakar—a huge Beverly Hills spa hosting a multiday swag event this week—says, “When [the news about the I.R.S.] hit last year, around Emmy time, we wondered whether or not we would go forward [with our gift events]. [Owner] Sonya [Dakar] talked on a CNN segment, and she said the guests have to report it, but they’re making their own choices about what they accept.” De Saracho adds, “The people who are going to be making the most money off this new initiative are the tax accountants [not the I.R.S.].”

Dana Wilkey, president of promotion of product placement and interactive of Adwil, asked, “How is the I.R.S. going to tax all this? What is being given away in many cases is not available to the general public. Like a trip, for example: They might say the room is worth $1,600, but these rooms aren’t really $1,600 rooms—they’re free rooms in this case being used by marketers for the purpose of promotion. They don’t have a market value. When the government comes up with a way to administer it, we are happy to follow the rules. Anyway, there’s going to be a way to write it all off.”

And she wasn’t done: “By the way, the Academy Awards did away with their gift baskets because of negative publicity—that’s it. The academy is an institution that got better known for its gift bags than what it was supposed to be celebrating that night.”
Posted 02.22.07

Sign up for the BizBash Daily - stay current with the event industry.
Your email inquiry will be sent to 3 venue