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US Congress steps into cyberspace

by danbriant / October 19, 2006 8:11 AM PDT

US politicians could soon be rubbing shoulders with orcs and night elves in World of Warcraft.
The Joint Economic Committee (JEC) of the US Congress has announced it is investigating the amount of commerce taking place in virtual game worlds.

The investigation is unlikely to mean that in-game trading will start to be taxed.

Many popular virtual worlds such as Eve Online and Second Life revolve around trade of one sort or another.

http://news.bbc.co.uk/1/hi/technology/6065534.stm

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(NT) (NT) They better be carefull about the CyberDoo
by Owyn / October 19, 2006 8:22 AM PDT
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(NT) (NT) lol watch out for the iRS :P
by robstak / October 19, 2006 11:08 AM PDT
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lol
by danbriant / October 19, 2006 7:09 PM PDT

LOL IRS comes after you and gank you Happy

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(NT) (NT) EMail Title: Dear Mr. Smith, you have been p0wned by the iRS
by robstak / October 20, 2006 5:20 AM PDT
In reply to: lol
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(NT) (NT) Virtual IRS?
by MarkFlax Forum moderator / October 21, 2006 5:58 AM PDT
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It's just a "tinfoil hat" scare
by cardsbb9 / October 20, 2006 6:06 AM PDT

There is a long precident to not tax barter. That is what an on-line trading is... barter.

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Not true. Barter income is taxable.
by Owyn / October 20, 2006 7:03 AM PDT
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Man, the Amish aren't going to like that
by cardsbb9 / October 21, 2006 12:41 AM PDT

When did that go into effect? I can remember building systems to support barter between oil companies because it wasn't taxed.

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In their case it's a wash.
by Owyn / October 21, 2006 1:46 AM PDT

Their business is farming. The trading of services is a wash because the Business Income is offset by a Business Expense. The IRS gets antsy about under the table Income.

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(NT) (NT) Wondering if the Use Tax police could get in the act/
by Owyn / October 21, 2006 6:12 AM PDT
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Money Laundering, Fraud, Deferring Taxable Income hmmm!
by Skeeteron_mypeter / October 20, 2006 7:13 AM PDT

My guess is that the Government is really after those who would use these venues for money laundering and for deferment of taxable income. Since some of the venues permit the exchange of actual currency into virtual money, these systems "in a small way" are another transaction based economy very much like a commodities or stock exchange. If the IRS were to few these virtual worlds as another form of an exchange, they could create a new tax system for the transactions that are made in and out of these worlds. That in a sense would allow them to watch and track for money laundering and illegal deferment of taxable income.

Check out:

US Code Of Collections:
Title 26, Subtitle A, Title 1 Subchapter O:
Gain or Loss on Disposition of Property

&

US Code Of Collections:
TITLE 26, Subtitle A, CHAPTER 1, Subchapter F, PART I
Regarding exemption from tax rules.

Uncle Sam wants his cut of the money. Wink

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Wouldn't WoW be a bad place to do that
by wizardjs / October 20, 2006 8:15 AM PDT

Correct me if I'm wrong, but what's the point since Gold can't be converted into and out of WoW. It's not like Second Life where there is an exchange ratefrom dollars to linden and back, WoW gold has no real-world value. Also, how does the IRS intend to get the money back out? Asking Blizzard to turn 1 million gold into 1 million dollars? I can understand a tax possibly on Second Life or Entopia Universe, but not WoW.

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