And the Oscar Goes To . . . the IRS!

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?

Nominees for the top five prizes — Best Actor, Best Actress, Best Supporting Actor, Best Supporting Actress, and Best Director — bring an extra guest to the party, in the form of the IRS. It's not because they take home any actual cash. It's because they leave with an "Everyone Wins" swag bag assembled by Distinctive Assets, a product-placement company that's not affiliated with the Academy of Motion Picture Arts & Sciences, but also not afraid to hitch their wagon to Oscar's relentless publicity machine.

Distinctive Assets has never been shy about promoting the value of their bag. In 2016, the collection, which included a 10-day trip to Israel, a 15-day "Walk Japan" tour, a year's worth of Audi rentals, and a 10,000-meal donation to the animal shelter of the donor's choice, crossed the $230,000 line. That sounds like a lot to the average fan. But it may not mean that much to the stars who can make north of $20 million per picture.

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!

This year's bag includes the usual collection of glamour vacations, including a small-ship cruise to Iceland, the Galapagos, the Amazon, or Costa Rica & Panama. You'll also find the sort of only-in-Hollywood treats you would expect: Coda Signature gift boxes with cannabis-infused hand-painted truffles and chocolate bars, private phobia-relief sessions with the world's #1 phobia expert, a CloSYS "spa kit for your mouth," and a PETA spy pen to help blow the whistle on animal abuse.

But this year, there's no price tag. "A great gift has nothing to do with the retail value," Distinctive Assets founder Lash Fary said in a statement. "For years we have been breaking one of the cardinal rules of gift giving by disclosing the price tag. Instead, we are trying to start a new tradition by simply celebrating the fun and festive nature of this legendary gift bag." (Of course, they'll still be declaring an amount on those 1099s they send next January.)

What if Best Supporting Actor Mahershala Ali doesn't want the tax headaches that come with his goodies? He can always give some to charity. (Does he really need the Blush & Whimsy limited-edition rose gold lipstick?) But he still has to report the value of anything he re-gifts in his income before deducting it as a charitable gift.

Last year, the Academy proposed a new award for Outstanding Achievement in Popular Film. It would be the first new category since Best Animated Feature in 2001. And it gives us hope that, someday, they'll add an Oscar for Best Performance in Tax Planning. Wouldn't that be great? We'll keep you posted and let you know when to look for us on the red carpet!

Don't Worry, No One Will Notice

Would anyone in their right mind sit down from scratch and develop the tax withholding system we have today? The IRS publishes tables telling employers how much to take out of everyone's paycheck, depending on their income, their filing status, and the amount they guesstimate they'll be claiming in deductions and credits. Then, at the end of the year, employees file their actual returns and hope it's the IRS coming out on the short end.

Lots of Americans use the tax withholding system as a piggy bank. Yes, letting the IRS hold your money for a year amounts to giving them an interest-free loan. And no, they won't do the same for you. But with savings accounts paying just a hair over 1% right now, plenty of taxpayers decide the forced discipline is worth more than the interest they give up.

In 2018, the average refund amounted to $2,782, which is enough to cover some bills, take a nice weekend trip, or maybe redo your family room for big-screen TV nirvana. But one enterprising 29-year-old named Christopher Blanchett found himself in a position to snag a refund worth writing home about. And when you hear his story, you'll realize that sometimes these stories of ours just write themselves.

Two years ago, Blanchett sat down to file his return. He had a W2 from a Sizzling Platter restaurant where he worked in Utah reporting $1,399 in income and zero withholding. And somehow, he had a W2 from a Tampa nursing home showing $17,098 in wages and a million dollars in withholding. But where you or I might have thought, "hmmmm, something looks off," Blanchett smelled opportunity — and he chose not to look his gift horse in the mouth.

So Blanchett chose to file his return with a straight face, based on those W2s. In due time, the IRS sent him a check for $980,000. He took that check and deposited in Sun Trust Bank. Sun Trust suspected fraud (ya think?), froze the funds, and eventually sent the money back to him. So Blanchett took that check and deposited it into a credit union, as one does, "falsely representing that the funds were from the estate of his deceased father."

And what did Blanchett actually do with his new-found wealth? He bought himself a used Lexus RC 350 sport coupe. Now that's not a car to sneeze at. The Wall Street Journal calls it "a capering boulevardier with a soundtrack of cute, kitteny growls." You can get one with all-wheel drive, heated leather seats, and Apple Carplay® integration. But really . . . a Lexus? That seems like an awfully mild play for a seven figure score. (Seriously, you'd think at least part of that windfall would find its way to a Ferrari dealer.)

By that time, the IRS had realized maybe there was a problem with a guy getting back 53 times his income in a refund. Last month, they seized $919,251 that was left in his bank accounts, along with the Lexus. And they're looking to take $809.94 that Blanchett's insurance company refunded him when he canceled the coverage on the Lexus. (Kinda like the Grinch taking the last can of Who Hash, right?) Prosecutors haven't filed charges against Blanchett, at least not yet. But it's a fair bet this story won't end well for him.

There's no real lesson in today's story, other than don't be a bonehead. But there's a great way to give yourself a nice refund, and you won't risk the IRS showing up with a tow truck and making off with your wheels. That answer, of course, is planning. So call us when you're ready to save, and enjoy the ride!