Will Oprah's Gift Cruise Cost Staff Taxes?

At the end of June, Oprah treated her staff and guests to a 10 day Mediterranean cruise through Greece, Italy, Spain, and Turkey. The trip for 1,700 produced a bill of $9.2 million dollars according to The New York Post, but may end up also costing the staff $1,000 each in taxes. The Post article debates whether the employees will be responsible for the charge considering the intention of the trip was a gift. The IRS may not see the company expense the way Harpo does as it is a gift from an employer, causing the staff to pay the tax. Since the spokesperson for Harpo and the Post's law expert disagree on the outcome, only time will tell if Oprah's team will appreciate their 10 day outing when it's time to file.

Personally, I don't think $1,000 will be an issue for the Harpo staffers the way the $6,000 tax impacted those recipients of the Pontiac G6 Oprah gave out to open the 2004 season. This tax issue shouldn't cause the controversy of 5 years ago. What are your thoughts? Would you rather have a trip with your family worth over $5,000 a person, or not have to pay a federal tax at the end of the year?