GameSpot Article: IRS Taxation of Game Assets Inevitable

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1  Gene Turnbow { 02.01.07 at 11:29 am }

I’ve been seeing this meme all over the Internet, and I have to say: “rubbish”. The IRS is already taxing Ailin Graef on her earnings in Second Life, because she cashes out her game points. There’s your taxable moment right there. Since there is already a mechanism in place for taxation of winnings from online gaming and virtual economies, there is no incentive for the IRS to change the way in which it deals with this. It’s not currently broken, and they’re already getting their money, so what would they have to gain by trying to climb into the game mechanics of every online game and try to sort the U.S. players from the non-U.S. players, game point by game point?

It’s amazing how a single ill-conceived, hair-brained idea can be picked up and echoed from one news site to another without comment or review. It’s a clear example of irresponsible, sensationalistic journalism. It harvests eye-balls and sells ad space, but has no value to the public whatever.

2  Dale Dietrich { 04.19.07 at 2:46 pm }

Gene … if you can find ad space sold on this blog, all the power to you!

As for your assertion that the IRS is taxing Ailin by cashing in her game points, I frankly do not know what you are talking about. As far as I know there is no withholding of taxes being done by Second Life or anyone else when Second Life currency is converted to the green back.

…Dale

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