Fortnite players may have to pay TAX on the game's virtual currency  

Markus Gates

Games 4 years ago
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Concerns are rising 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 IRS' website.

Shortly after social media users noticed the disclosure requirement and tweeted about it, the IRS deleted the reference on Wednesday and went silent on the topic.

That, say Crytocurrency experts, made things even more confusing about what the agency expects Americans to report on their 1040 forms as filing season has gotten underway.

Was the reference to Fortnite virtual currency, as well as a mention of the game Roblox - which sells its players Robux to buy avatar upgrades - a mistake, or did the agency really mean to require the reporting of game money as it does with actual cryptocurrency?

'The definition of virtual currency in IRS guidance would still encompass these,' Jerry Brito, executive director at the Coin Center, a virtual currency think tank, told CNN Business.

Brito set off an online storm of worry and protest after posting the language of the IRS guidelines mentioning the V-bucks, which tax payers would have to report for the first time when answering the question, 'At any time during 2019, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?' on their 1040s.

'I don't think they realized the consequences of their 1040 question,' he told CNN, after the mention was deleted.

The impacts will surely affect players of popular online games such as Apex Legends, PlayerUnknown's Battlegrounds and League of Legends, all which use gaming currencies and are likely subject to the rule, Neeraj Agrawal, a spokesman for the Coin Center told CNN.

'Every major online game has some kind of in-game economy at this point,' he said. 'It's a very popular mechanic.'

The reporting requirements would especially impact the popular Fortnite, which has 250 million registered players and brought in $1.8 billion in revenue last year, according to industry estimates, reports CNN.

The requirement in the guidelines is believed to have gone back to October. The exact wording had said, 'Bitcoin, Ether, Roblox, and V-bucks are a few examples of a convertible virtual currency.'

The IRS on its website defines a convertible virtual currency as one 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 purchased for, or exchanged into, U.S. dollars, euros, and other real or virtual currencies.'

Source: https://www.dailymail.co.uk/news/article-8001589/Fornite-players-pay-TAX-virtual-currency-IRS-guidelines-V-bucks-leaked.html
  • IRS
  • Cryptocurrency
  • Virtual currency
  • Fortnite