IRS reports to Congress: Virtual worlds/MMOGs have always been taxable

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Filed under: Economy, News items, Second Life, Politics, Legal, Virtual worlds

Section 7803(c)(2)(B)(ii) of the Internal Revenue Code requires the National Taxpayer Advocate to submit a report to Congress each year and in it, among other things, to identify at least 20 of the most serious problems encountered by taxpayers and to make administrative and legislative recommendations to mitigate those problems. Thus, the statute requires that the report focus on problems and areas in need of improvement.

Of the 20 "most serious problems encountered by taxpayers", number 13 is The IRS Should Proactively Address Emerging Issues Such as Those Arising From "Virtual Worlds".

For the impatient, who just want the sound-bite, it boils down to the position that the existing US Tax Code already covers much of what takes place in virtual environments, with respect to assets, virtual currencies and transactions. Indeed most of the Code already deals with many things that are no less virtual and no more corporeal than are virtual environments. The only real issue the IRS seems to have with it is a lack of information on the part of the taxpayer about if, when and how to report and pay their taxes relating to virtual environment activities, and the lack of any uniform positional advice.

Continue reading IRS reports to Congress: Virtual worlds/MMOGs have always been taxable

IRS reports to Congress: Virtual worlds/MMOGs have always been taxable originally appeared on Massively on Tue, 13 Jan 2009 10:00:00 EST. Please see our terms for use of feeds.



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