Tip.It Times Presents: Tax Collection ���¢�¢â�š�¬�¢â�¬�� A New RuneScape...

[kenny_thorn]

taxes? taxes? taxes?

 

 

 

 

 

 

 

omg it would completely ruin runescape forever............

 

 

 

 

 

 

 

hey the US cant tax me!! I'm a minor and live in scotland......

[maggie748]

It's an interesting article to me, it got me to sign up so that I could reply.

 

 

 

 

 

 

 

In reply to a point that has been made repeatedly, that RS is based in Britain and most of the people playing are American, it makes no difference. As a Canadian citizen and resident, if I make money in the US I pay US income tax on it. If you make enough money to tax then you pay income tax in that country. If you make the money in a tax haven, then you pay income tax when you bring it into the country. I can see the various Revenue agencies getting together to harmonize such things. If you sell anything for a profit, then you should (and must) pay taxes on that profit.

 

 

 

 

 

 

 

Also, taxation is how we pay for the services that the governments provide; we pay civic taxes to support police, fire, schools. We pay federal/provincial/state taxes to support health care, higher education, infrastructure, the military. Unless you want to get into an extreme libertarian system where you get what you pay for and nothing else, then this is how we, as a society, determine what we will support and to what extent. Sure there are excesses and waste but that is to be expected and guarded against.

 

 

 

 

 

 

 

IRS means Internal Revenue Service, not international.

[13bee]

wow I can see it now - "Third Grade MMORPG Player Arrested for Tax Evasion"

 

 

 

DETROIT - A third grader was recently brought to trial under charges of tax evasion after the boy did not report his earnings after selling sixty thousand in-game lobsters. A spokesman from the IRS: "This sort of criminal act we cannot allow. This child is an example. Children: pay the tax or pay the time!" No more at this time.

[Stryper7]

Personally I find this an outrage, as Regent of Miscellania, a sovreign nation, I refuse to pay any gold or tribute to the governments of any other country.

 

 

 

 

 

 

 

Long live King Vargas!

 

 

 

 

 

 

 

Stryper7, Regent of Miscellania

 

 

 

 

 

 

 

:shame:

[Randox]

Just as long as they dont introduce a tax ingame where you pay gp. But the IRS can btie me. I don't pay taxes and I don't live in the US.

[Duke_Freedom]

Making money in RS for most of us is not taxable income, since we aren't selling our in-game resources for real life money. RS users who don't break these rules aren't making an income and can't be taxed.

 

 

 

 

 

 

 

It is rather questionable whether people who do not participate in RMT do not generate 'income'. If the in-game resources you make in the game have a fair market value you are actually having an income - income is not defined as "only dollar income". I believe this is partially what the IRS is researching.

 

 

 

 

 

 

 

So the IRS can find all kinds of taxing interesting, but the fact is that they can't change the legislature, they can only enforce the law that is provided for them.

 

 

 

 

 

 

 

The IRS 'decides' whether something is taxable under the current law or not, which is exactly what this is about.

 

 

 

 

 

 

 

 

question: are things like ebay taxed?

 

 

 

Exactly. The article says online currency is becoming a "big business with 7-9 billion dollars" fluctuating annually. What about the hundreds of billions that fluctuate annually in other online auctions and eBay sales like cars, laptops, machinery, etc?

 

 

 

 

 

 

 

There's a huge difference between income and trade. The 7-9 billion dollar figure is a new and potentially taxable income figure. The hundreds of billions figure describes the amount of trade of taking place at ebay and businesses selling their products via eBay already pay tax.

 

 

 

 

 

 

 

The reason why the IRS is also looking into taxing in-game trade is because it may fall into the category of bartering. What that is and other interesting info surrounding the taxing can be read in this article.

 

 

 

 

 

 

 

And for those who question the seriousness of taxability of MMOG income might want to take a look at this article too...

 

 

 

 

 

 

 

Edit: The IRS and the US government have no use for gp - they obviously only tax in real dollars.

[juvic]

good point there good point

[Holtman07]

:x They would have to have something like insurance then because of the real money inclusion!

[lazy998]

wow I can see it now - "Third Grade MMORPG Player Arrested for Tax Evasion"

 

 

 

DETROIT - A third grader was recently brought to trial under charges of tax evasion after the boy did not report his earnings after selling sixty thousand in-game lobsters. A spokesman from the IRS: "This sort of criminal act we cannot allow. This child is an example. Children: pay the tax or pay the time!" No more at this time.

 

 

 

 

 

 

 

LOL I can see it now. Mam we have sources that your young child is not paying his taxes.

[Father_Time89]

So many legal pitfalls, loopholes and unanswered questions, for example if we play on British servers are we then technically not making money in the U.S? Also are we eligible for property tax (although if you really think about it unless you move your house all your land's total value equals 1k).

 

 

 

There is also the fact that everything in the game belongs to jagex, our items gold etc, so technically speaking we are making "money" for a british company not ourselves. Also if you die you are ineligible for collect taxes if you have ever died in runescape say "I".

[Father_Time89]

wow I can see it now - "Third Grade MMORPG Player Arrested for Tax Evasion"

 

 

 

DETROIT - A third grader was recently brought to trial under charges of tax evasion after the boy did not report his earnings after selling sixty thousand in-game lobsters. A spokesman from the IRS: "This sort of criminal act we cannot allow. This child is an example. Children: pay the tax or pay the time!" No more at this time.

 

 

 

 

 

 

 

If they are going to treat our runescape money like real money I can see another headline in the future.

 

 

 

 

 

 

 

Mob boss father time arrested for rum smuggling and selling stolen goods.

 

 

 

"He is involved in a criminal ring" one official says, "he has people steal silk, and they they give him the stolen silk and he sells it for 60gp each, and splits the dough with his cronies." Father time was also accused of stealing money from guards knights, watchmen and other keepers of the peace. He was also involved in stealing massive amounts of jewelry from a cult to finance his mansion. He ahs also been known to break out of jail and the local pillory many times and kill random people for money. "he is a thief and we will give him no mercy." said one officer dragging away the 16 year old away in hand cuffs. "He muttered something about it being only a game, how dumb does he think i am? if it were really a game it would have cheat codes."

[Father_Time89]

If this bill gets passed I suspect some a protest in washingotn d.c. (heck I'd join if it wasn't for the fact I live in california.)

[Guest arkdemon]

taxes on rs would be madness couldn't charge me thou don't live in USA :wink:

[dragonfly224]

since im a minor in the US, i dont pay taxes so this was very confgusing........ :wall: :wall: :x :uhh: :-s :-k :notalk: :-X :shame: :shock:

[Tsigane]

since im a minor in the US, i dont pay taxes so this was very confgusing........ :wall: :wall: :x :uhh: :-s :-k :notalk: :-X :shame: :shock:

 

 

 

You don't pay taxes because you probably have no income [allowance your parents give you doesn't count]. If you have some regular or semi-regular income that's not previously taxed [if you're employed by someone, that person/firm is usually required to pay your taxes before giving you your pay check] you would be required to pay taxes.

 

 

 

 

 

 

 

Being a minor or living in USA dosn't matter.

[8loodworior]

how lame is this?? the IRS wanting to tax a game..would we have to pay real money or gp? why would our government want to tax a game in which children play if that actually happened that would teach the youth that the government is hungry for money (which they are at the moment because of the war) and would do something so low to get it . that would be a very very dark day for the us government to tax people on a game.

[BlueLancer]

Why do you guys still keep guessing they'd tax GP. :lol: It's worthless to them because they can't legally convert it into usable money.

[beefeta]

IF Jagex, for some obsurd set of reasons & circumstances, were elligible for online money taxes, many things would happen, one could be a tax dodge.

 

 

 

 

 

 

 

Taxes are paid once every six months, and if you were elligible to pay taxes, you would also have the right to tax credits, insurance etc.. The first of these is that you coud insure your runescape cash, you then have 6 months till the next tax to "accidently lose it" while pking, and claim your insurance money, tax month goes by, you have only a few mill left in bank, and remember, seeing as runescape cash is now taxed, runescape cash is now veiwed as a trading medium, so it is legal to buy rs cash, you then use the insurance money to buy back as much as or more than you lost. Another even better scam works on the principle that you have 30 days or so to file a tax report, a friend files his report on the first day, shortly afterward, you let him "pk you" and take almost everything you have, you then file your tax report, and claim on the insurance *note due to the runescape identity problem the editor outlined, they could not tell that the two occurances were linked* after claiming on the insurance, you use that to buy some more rs cash off ebay or wherever, use it for 6 months, then sell it all and claim you have nothing on runescape to be taxed, voila, 1. you ****ed off the government, 2. you got some extra cash, 3. you had more cash on rs.

[kdb148]

 

Making money in RS for most of us is not taxable income, since we aren't selling our in-game resources for real life money. RS users who don't break these rules aren't making an income and can't be taxed.

 

 

 

 

 

 

 

It is rather questionable whether people who do not participate in RMT do not generate 'income'. If the in-game resources you make in the game have a fair market value you are actually having an income - income is not defined as "only dollar income". I believe this is partially what the IRS is researching.

 

 

 

 

 

 

 

But the IRS can't collect taxes on income related to an asset appreciating in value until that income is actually realized, i.e. the asset is sold. Say you buy 100 shares of a stock today for $10 per share. Tomorrow, the stock goes up to $11 per share. You don't suddenly owe taxes on the $100 you just made - unless you sell the stock.

 

 

 

 

 

 

 

The IRS really does only tax dollar income. They give out breaks often times for unrealized losses, for example a landlord gets to deduct the depreciation of the building he owns every year, even though he won't take that loss until the building is sold. But it doesn't work in reverse. By definition, the IRS taxes INCOME, and income from assets isn't realized until that asset is sold. If you don't make a tangible real-life profit, in dollars, there is nothing for the IRS to tax, at least as far as income is concerned.

[Duke_Freedom]

But the IRS can't collect taxes on income related to an asset appreciating in value until that income is actually realized, i.e. the asset is sold. Say you buy 100 shares of a stock today for $10 per share. Tomorrow, the stock goes up to $11 per share. You don't suddenly owe taxes on the $100 you just made - unless you sell the stock.

 

 

 

 

 

 

 

The IRS really does only tax dollar income. They give out breaks often times for unrealized losses, for example a landlord gets to deduct the depreciation of the building he owns every year, even though he won't take that loss until the building is sold. But it doesn't work in reverse. By definition, the IRS taxes INCOME, and income from assets isn't realized until that asset is sold. If you don't make a tangible real-life profit, in dollars, there is nothing for the IRS to tax, at least as far as income is concerned.

 

 

 

 

 

 

 

That's just not true:

 

 

 

 

 

 

 

"Bartering occurs when you exchange goods or services without exchanging money. An example of bartering is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of goods and services exchanged must be included in the income of both parties."

[kdb148]

Well, bartering is something of a special case. And it's kind of absurd to think the IRS would go after such transactions as bartering. There are probably millions of trades made in RS alone every day - even if the IRS could compel Jagex to provide them with data about each and every one of those trades, the IRS would have to employ teams of people just to pore over that data to ensure that RS players are picking up their fair share of the tax burden.

 

 

 

 

 

 

 

One of the articles you cited points out that the rules on bartering were instituted to close a loophole in the tax code. As it stands now, there's not really a way to game the system, especially in a game like RS that doesn't encourage real world trading. Not only that, but it doesn't fit the definition of bartering to begin with. Bartering has to do with professional-type services - RS is a leisure time activity, and all the items and coins in players' banks right now is the product of their leisure time.

 

 

 

 

 

 

 

Think about that - once you start going in and taxing games, what next? You could just as easily argue that, for example, sexual intercourse is simply a barter of services. Certainly a dollar market exists, and it wouldn't be too terribly difficult to ascertain the value of those services. The point is, leisure activities aren't part of what the IRS or courts intended to bring under the purview of the tax code when those rulings were handed down. Like many provisions, it was done simply to ensure that people weren't able to mask income as something else.

[x1992x]

what do the taxe have to do with a new skill. im just confused :?

[Duke_Freedom]

Think about that - once you start going in and taxing games, what next?

 

 

 

 

 

 

 

"Games" like poker are taxed too. Players who make money by playing poker have to declare this as income. The arguement that it is just a game and that it is a leisure activity is not that relevant.

 

 

 

 

 

 

 

Ofcourse you are right that according to the ToS and the Rules of Conduct of most game companies, the theoretical trade of game money for real money is disallowed so it is already questionable if they can observe trade in real dollars there - but again this is quite related to the in-depth intellectual property right discussions that take place. On the other hand, the prohibition of trading certain products has never stopped people from putting a price on those products. The same is true for the value of in-game money, which can be observed easily on the various auction sites on the web.

 

 

 

 

 

 

 

However, this is totally different for games as Second Life, Project Entropia, Everquest II and others, where it is completely legal and encouraged to buy and sell the in-game money. Some people in these games are already making a living (or even becomming a millionair) with these games. Others are buying virtual islands for $26,500 (and even earning back their initial investement within a year) or virtual space stations for even $100,000. The total trade value of Second Life seems to be ~$600,000 per day. With that in mind, it is not strange that the IRS is also considering taxing in-game transactions, at least in those 'games'.

[lordadam21]

Ok I don't know if I read that right but if they plan on taxing an onloin game im quiting because that's well I can't really say what I want to.... It's plain stupid taxing an online game. What's next everytime you walk down the street? :evil: :x

[I]

So many legal pitfalls, loopholes and unanswered questions, for example if we play on British servers are we then technically not making money in the U.S? Also are we eligible for property tax (although if you really think about it unless you move your house all your land's total value equals 1k).

 

 

 

There is also the fact that everything in the game belongs to jagex, our items gold etc, so technically speaking we are making "money" for a british company not ourselves. Also if you die you are ineligible for collect taxes if you have ever died in runescape say "I".

 

 

 

 

 

 

 

lol look at my name!!!

 

 

 

 

 

 

 

anyway just think about it how much would 1 mill sell for?? 5 bucks??

 

 

 

 

 

 

 

so im gona send them my 30 cents?? lol ill mail them a stamp..