Concerns are growing that millions of Fortnite players may have to pay taxes on the “V-bucks” they use in the popular online game after the disclosure requirement was mentioned on the website. the IRS.
Shortly after social media users noticed the disclosure requirement and tweeted about it, the IRS removed the reference on Wednesday and remained silent on the matter.
This, according to cryptocurrency experts, has made matters even more confusing as to what the agency expects Americans to report on their 1040 forms as the deposit season has begun.
The reference to the Fortnite virtual currency, as well as a mention of the game Roblox – which sells its players Robux to purchase avatar upgrades – was it wrong, or did the agency really have the intending to require declaration of gambling money like it does with real cryptocurrency?
Concerns grow for millions of Fortnite players (pictured) who may have to pay taxes on the ‘V-bucks’ they use in the popular online game after the disclosure requirement was mentioned on the website from the IRS.
Shortly after social media users noticed the disclosure requirement and tweeted about it, the IRS removed the reference (photo) on Wednesday and remained silent on the matter.
In the language of the deleted IRS guidelines mentioning V-bucks, taxpayers should report the video currency for the first time on their IRS 1040 returns for tax year 2019 (pictured)
‘[The] the definition of virtual currency in the IRS guidelines would still encompass them, ”Jerry Brito, executive director of the Coin Center, a virtual currency think tank, told CNN Business.
Brito sparked a storm of concern and protest online after he released the language of the IRS guidelines mentioning V-bucks, which taxpayers are expected to report for the first time by answering the question: “Anytime in 2019, have you received, sell, send, exchange or otherwise acquire a financial interest in a virtual currency? ‘ on their 1040.
“I don’t think they realized the consequences of their 1040 question,” he told CNN, after the reference was removed.
The impacts will surely affect players of popular online games such as Apex Legends, PlayerUnknown’s Battlegrounds, and League of Legends, all of whom use in-game currencies and are likely subject to the rule, Coin spokesperson Neeraj Agrawal told CNN. Center.
“Every major online game has some sort of in-game economy at this point,” he said. “He’s a very popular mechanic.
Jerry Brito, executive director of the Coin Center, a virtual currency think tank, sparked a storm of concern and protest online after he released language of IRS guidelines mentioning “V-bucks”
Brito also tweeted the question on IRS Tax Form 1040 where Fortnite players will likely be required to report how V-bucks, “At any time in 2019, have you received, sold, sent, traded or otherwise acquired a financial interest in a business. virtual currency? ‘
Yan Pritzker responded to Brito’s tweets saying the IRS reporting requirement was “extremely invasive and unconstitutional.” What right do they have to ask if people have bought or acquired something?
Lucas Collins tweeted that the US government refuses to recognize cryptocurrency, while the IRS still wants its “pound of flesh” in response to pooling video game money with the same reporting requirements governing crypto coins
A Twitter user mocked the IRS seeking to tax virtual currency, asking if $ 10 spent on e-parking in Austin, Texas, or if money added to a Starbucks card should be reported to the agency.
The reporting requirements would have a particular impact on the popular Fortnite, which has 250 million registered players and generated $ 1.8 billion in revenue last year, according to industry estimates, reports CNN.
It is believed that the requirement in the guidelines dates back to October. The exact wording read: “Bitcoin, Ether, Roblox and V-bucks are some examples of convertible virtual currency.”
The IRS on its website defines convertible virtual currency as currency that has an equivalent value in real currency or acts as a substitute for real currency.
The agency also says virtual currency can be “digitally traded between users and can be bought or traded for US dollars, euros and other real or virtual currencies.”
The reporting requirements would have a particular impact on some 250 million registered Fortnite players. Online gambling (pictured) brought in $ 1.8 billion in revenue last year, according to industry estimates
A spokesperson for Epic Games, which offers Fortnite free to players on various platforms, said Bloomberg V-bucks should not be applied to the definition.
“V-Bucks cannot” be redeemed digitally between users, “nor” can be “redeemed for US dollars, euros and other real or virtual currencies,” the spokesperson told the outlet.
Roblox, on the other hand, allows certain users aged 13 and over to cash out their Robux for US dollars if they have at least 100,000 Robux in their account and are members of a Roblox premium service.
“Robux can only be earned and traded by developers for real currency through our developer swap program,” a company spokesperson told Bloomberg.
Roblox allows certain users aged 13 and over to cash out their Robux for US dollars if they have at least 100,000 Robux in their account and are members of a Roblox premium service
“Prior to any payment to developers, we require that they have an IRS form on file with Roblox, and we report all DevEx payments to the IRS using Form 1099.”
Players can also use real money to purchase video currencies through third party marketplaces, which have no support from game developers.
“Gaming economies are generally closed economies where currency cannot be cashed in or exchanged,” the Entertainment Software Association said in a statement to Bloomberg.
The association said it hoped the IRS would reverse guidelines it had removed on “V-bucks” games and other gambling funds.
“Financial regulators who have examined in detail the status of in-game currencies have treated them separately from Bitcoin and similar virtual currencies precisely because they cannot be cashed,” the association said. “We believe this is the appropriate approach and hope that upon further review the IRS will correct its guidance.”