IRS removes guidance on Fortnite game currency: report

IRS removes guidance on Fortnite game currency: report
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The IRS has removed guidance from its website that said in-game virtual currency in video games such as Fortnite could be subject to a new reporting requirement on federal tax returns.

IRS Chief Counsel Michael Desmond said the video game currencies should not have been included in the guidance alongside bitcoin, according to a report by Bloomberg Tax

He described their inclusion as a mistake, but provided little clarity on how the error occurred.

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

The language had identified V-bucks, the currency used in Fortnite, as an example of a convertible virtual currency. Bloomberg Tax had asked the IRS if gamers who purchased the currencies would have to disclose the information on their tax forms, and the language was removed from the IRS's website shortly after Bloomberg Tax inquired to the agency.

The IRS has become interested in cryptocurrencies and for the first time is asking taxpayers to report if they had traded or sold them on the tax returns they file this year. 

Fortnite is a massive online game published by Epic Games, amassing $1.8 billion in revenue last year, according to industry estimates from The Verge. Last March, Epic Games said the game is nearing 250 million registered players around the globe.