IRS erroneously considered Fortnite V-Bucks and Roblox Robux "virtual currencies" subject to taxation

The IRS removed language from their Web site that listed Fortnite V-Bucks and Roblox Robux as examples of convertible virtual currencies, like Bitcoin. They were included on a page about virtual currencies as they relate to a new question on IRS Form 1040 that asks whether the taxpayer, sold, exchanged, or acquired financial interest in any virtual currency. From Bloomberg:

The language was removed hours after Bloomberg Tax asked if gamers who purchased or earned in-game currencies would have to disclose that on their 2019 tax returns.

IRS Chief Counsel Michael Desmond indicated that the inclusion of the video game currencies was a mistake, though he offered no insight on how they ended up alongside Bitcoin on the list of examples.

“It was corrected and that was done quickly—as soon as it was brought to our attention,” Desmond told reporters Thursday at a Tax Council Policy Institute conference in Washington...

Desmond demurred when asked to confirm that gamers wouldn’t need to mark ‘yes’ to the new 1040 question, but said addressing gaming currencies in the virtual currency context isn’t a major focus for the agency right now.

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Virtually every rich country on Earth provides pre-completed tax-returns that you can either ignore (and pay an accountant or do your own taxes), or just sign and return: after all, the government already knows what you're earning and how much tax you paid, so they can do all the heavy lifting for your annual return. Read the rest

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