The Tax Man is still after your V-Bucks and Apex Coins for 2019’s taxes, although there appears to be some confusion at the IRS when it comes to virtual currencies.
When you’re filling out your income taxes, you generally don’t worry about the $5 you spent buying a skin in Fortnite. Or even the $20 you spent opening loot boxes last year. Generally speaking, neither did the IRS, but some new updates have thrown confusion over some pretty serious questions when it comes to virtual currencies.
On Wednesday, the IRS removed all mention of in-game currencies from their website detailing how to handle virtual currencies for income tax purposes. On the surface, this sounds like business as usual; you never cared about your in-game spending on virtual currencies, and neither did the IRS.
IRS Chief Counsel Michael Desmond, speaking at a Washington conference on Thursday, said that the update was done to correct an error. “It was corrected and that was done quickly — as soon as it was brought to our attention,” he said. When Bloomberg asked for clarification on just what the error was, Desmond declined to clarify.
If you look at an archived version of the IRS website, you’ll find that it used to mention Roblox and Fortnite’s currencies, but the current version no longer does. Again, this seems like the IRS is just ignoring games.
But not so fast. CNN reports that they spoke to multiple tax experts and they all believe that the IRS is still carefully scrutinizing in-game currencies. The outlet specifically mentions that on form 1040, Americans will need to declare their in-game income and determine if it’s subject to taxation.
This might matter more to professional gamers and esports athletes, but it’s hard to imagine this being relevant to casual gamers. Still, we expect the IRS to publish an explanation on just what is and what isn’t a virtual currency in the near future.
Source: Bloomberg, CNN
