They really don’t though.

“Hey, we’ll give you a free stay if you promote our hotel!” is compensatory.

“Hey, we’ll give you a free stay” isn’t obviously so.

But no company would simply give away free stays. That would cost them with no benefit.

There is a clear if unstated expectation that they will receive positive reviews and promotion as a result.

It will be marked as an expense outgoing to a third party by Disney, and the third party will be named or identified. That third party if did not account for that income and get audited, will be provided a demand letter. Vast majority of the "audits" are fully automated using cross referencing expenses & deductions to incomes.

There is no such thing as "free" when it comes to the US IRS.

None of this means that you have to pay taxes.

But yeah, you're right. If you get audited, you might have to explain to the IRS that this is not compensatory income.

> The IRS have a completely different point of view.

Oh, I fully agree and I would bet a majority of them know that as well, they just have figured out a way to use some weasel words to act like it's not a payment to the general public.

It's because there is no exchange, if I give you a birthday gift can that be considered income? Obviously not as I am not asking for something in return.

However:

If I buy you a gift and we agree for the gift you do task x for me. Now that is income and the value of the gift must be considered income on your tax return.

Disney isn't saying "here is a room for free if you do x, y , z"

Disney is saying "here is a room for free" and that is the end of it.

Of course the obvious issue for Disney is that the influencer might never do the review of the park and never in a million years could Disney take them to court complaining services were not rendered.

You cannot give a gift with expectation of return.

So it's not income.

But it's limited because the one giving you the gift really has to trust that you'll do the thing you do.

I am surprised Disney would bother to be honest. I thought their theme parks were popular enough already.

Why does Coke pay for advertising?

> I am surprised Disney would bother to be honest. I thought their theme parks were popular enough already.

They want to keep being popular ;). Same as the coke comment above me

> It's because there is no exchange, if I give you a birthday gift can that be considered income? Obviously not as I am not asking for something in return.

> However:

> If I buy you a gift and we agree for the gift you do task x for me. Now that is income and the value of the gift must be considered income on your tax return.

Caveat donor! The hand of the taxman extends somewhat further than laid out here.

https://www.irs.gov/businesses/small-businesses-self-employe... :)

In Denmark, gifts beyond a certain amount are taxable.

The USA has similar rules.

https://skat.dk/taxrates

https://www.irs.gov/businesses/small-businesses-self-employe...