Looks like the free gift bags stars receive when they present at awards shows won’t be entirely free after all.

Reuters is reporting that the Internal Revenue Service (IRS) is reminding stars that those goodie bags are technically taxable income.

The bags usually contain free gifts, from jewelry to make up to electronics, and the value of the bags can range from $40,000-$100,000.

Despite the reminder that the gifts are taxable, the IRS also announced it struck a deal with the Academy of Motion Pictures and Sciences that will see stars who received the gifts until 2005 exempt from paying back taxes. This year’s past Oscars, however, stars will have to report the gift bags on their taxes.

But don’t fret, the stars of the Oscars won’t be taxed to death from Uncle Sam – the Academy has decided to stop giving out gift bags by the 2007 awards.

Reuters said it was not immediately known if the other awards shows would follow suit with the Oscars.






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