IRS to Contest Winner: There’s No Such Thing as a Free Space Ride

Leave it to the IRS to crush a man’s childhood fantasy. Brian Emmett won a trip into outer space, thanks to the Oracle Corp., but the estimated tax bill of $25,000 forced him to pass up his joy ride.

Emmett, a 31-year-old software consultant who has attended space camp, won a 2005 sweepstakes by answering a series of questions online about Java computer code, according to wire services reports. He won a seat on a future commercial space flight valued at $138,000.

But once-in-a-lifetime experience or not, the IRS has its rules. The agency considers any winnings from “lottery drawings, TV game shows and other contests,” to be taxable income, so Emmett forfeited his ticket to space.

“There was definitely a period of mourning,” Emmett said. “I was totally crestfallen. Everything you had hoped for as a kid sort of evaporates in front of you."

Astronaut wannabes beware: Check the fine print. Be skeptical if your winnings sound too good to be true. ??"I don't see how an average person can swing that kind of tax payment. It's a big, big bite," said tax attorney Donna LeValley, contributing editor for J.K. Lasser's annual tax guide.

Oracle, which worked in conjunction with Space Adventures, is not the only company to tempt contestants with trips into space. The Aero-News Network reported that Microsoft is offering a seat on Rocketplane Limited's LearJet-based space vehicle as the grand prize in its “Vanishing Point” promotion for the Vista operating system.

In Microsoft's case, group marketing manager Brian Marr said a $50,000 check comes with the $253,500 prize to cover the winner's taxes.

As for Oracle, the flight will go on. The software company is in the process of naming Emmett’s replacement and still has two other winners on board from Asia and Europe.

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