What began as a jaw-dropping moment of televised generosity ended with a surprising lesson in tax law. On Sept. 13, 2004, Oprah Winfrey made headlines when she “gifted” each member of her studio audience a brand-new Pontiac G6 sedan. The giveaway — worth approximately $7 million in total — instantly became one of the most iconic moments in daytime television history.
Nothing In Life Is Free
With 276 lucky audience members shrieking in joy as they discovered a key to a new car under their seats, the phrase “You get a car!” was cemented in pop culture. But shortly after the cameras stopped rolling, some recipients found themselves less than thrilled. The reason? A hefty tax bill.
According to reporting by CNN Money, although General Motors and Pontiac, the sponsor of the giveaway, covered the state sales tax and licensing fees, the federal government stepped in with its own demands. The IRS classified the cars as taxable income, not gifts, meaning each recipient was responsible for paying income taxes on the car’s estimated $28,500 value.
For many, this translated into a surprise bill of roughly $6,000 to $7,000 — an amount that left some fans scrambling. As reported in a 2004 Chicago Tribune article, some recipients considered declining the cars, while others chose to sell the vehicles in order to pay off the taxes.
From a tax perspective, it doesn’t matter whether audience members won the cars in a contest, applied to be on the show, or were simply lucky enough to be seated in the studio. Under Section 74 of the Internal Revenue Code—created specifically to address giveaways on radio and television—any item of value received in such settings is considered taxable income.
Although, there is no formal definition of “prize” or “award” in the Code, IRS Regulation 1.74-1 explains: “Prizes or awards which are includible in gross income include (but are not limited to) amounts received from radio and television giveaway shows.”
So, receiving a car on a talk show is treated the same as winning the lottery. It’s not a gift, it’s income.
As Forbes reported at the time of the Oprah car giveaway, the cars were part of a planned promotional campaign for both Oprah’s new season and General Motors’ new vehicle. More than 500 media stories appeared within 48 hours, meaning the giveaway was a strategic marketing move, not an act of pure altruism.
A spokesperson for Harpo Productions, confirmed to Forbes that GM handled the tax-related logistics. GM covered local and sales taxes and licensing fees, allowing winners to drive off the lot without paying out-of-pocket at the time. But, the tax story didn’t end there.
GM issued 1099-MISC forms to recipients, reporting the full value of the car and any taxes GM paid on their behalf. The reported income varied based on the car’s configuration and the tax rate in the winner’s home state. Recipients could choose the version and options package they preferred.
Harpo Productions, Winfrey’s media company, offered a few options to attendees. They could accept the car and pay the taxes, refuse the gift altogether, or sell the vehicle to cover their tax liability. While many audience members opted to keep the car despite the cost, others felt blindsided by the financial obligation.
The giveaway sparked national debate over how gifts on game and talk shows are taxed. According to the IRS, prizes won on television or game shows are considered earned income, much like lottery winnings. While generous in spirit, such gifts often leave winners with an unexpected financial burden.
Winfrey, who has built a media empire on empathy and empowerment, maintained that the giveaway was intended to help people in need — particularly those who lacked access to reliable transportation. And for many, the gesture succeeded.
Still, the moment became a cautionary tale in the fine print of giveaways. The viral resurfacing of the story on social media in 2025, including a widely circulated Instagram post, has reignited conversation around the hidden costs of “free” gifts.
“But we paid for the sales tax and the registration for each car, and we told the audience after, if they didn’t want to have to pay a gift tax, they could actually take cash for the car. And because we didn’t pay the gift tax, people complained to the press, and that was devastating,” said a former producer of the show.
Two decades later, Oprah’s iconic moment remains a landmark in television history. But for some, the day came with a lesson they didn’t expect — generosity can come with strings attached, especially when the IRS gets involved.
