Sitcom Tax: Jack Benny vs. the IRS

Do you remember the old Jack Benny Show of the 50s and 60s? Jack played himself, a comedian who nurtured a reputation as a world-class skinflint. Recently I saw an episode on DVD that originally debuted in 1964.

The show opened with Jack finding out he was being investigated by the IRS. With his reputation for cheapness, you might assume that this audit was based on Jack underpaying his taxes. It wasn't. Instead, the IRS sent an agent to his home to interview him because, on his tax return, Jack claimed entertainment expense of only $3.90 on an income of $375,000. Hmmm. (In today's dollars, that's an entertainment expense of less than $26 on an income of over $2,555,000.)

I don't know about you, but I suspect that even in the 60s, the IRS had better things to do than check out suspected underreporting of deductions, especially entertainment expense. I won't pretend to know what the actual tax law was during that era. After all, I didn't appear as a tax deduction on my parents' return until 1956, so it was a long time before I paid attention to the Tax Code. Today's IRS does, of course, use target ranges to determine if a taxpayer‘s deductions exceed the averages for his or her income level. But I'm pretty sure they'll never knock on my door to tell me I'm a cheap hostess.

Sitcom Tax If you're wondering where Jack spent the $3.90, here's the story. It seems he was having dinner out when he spied Mr. and Mrs. Jimmy Stewart at another table. Jack insisted that they join him. The Stewarts assumed that Jack was offering to buy their dinner, but they should've known better. When the check came, Jack announced that he was going to “allow” Jimmy to pick up the whole tab because, he said, it would make a nice tax deduction. That's when Mrs. Stewart had had enough, and expressed her opinion by dumping her salad on Jack. The dry-cleaning bill came to $3.90, which Jack included on his tax return as an entertainment expense.