Should Avatars Be Issued 1099-MISCs and Pay Taxes?
Avatars may not be taxed directly yet, but their creators may soon be.
China and Australia are already experimenting with taxation of sales in virtual worlds. Now, in the US, the IRS’s “taxpayer advocate” has encouraged the service to consider taxation in virtual worlds. The Washington Post suggests the IRS could improve voluntary tax compliance by issuing guidance on how taxpayers should report economic activities in virtual worlds.
It used to be that the only thing avatars needed to worry about was avoiding virtual packs of flying phalluses. But pretty soon they may also need chops in accounting, paying taxes, and avoiding virtual audits.
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