IRS taxation of online game virtual assets inevitable

If you are a hard-core player of virtual worlds like World of Warcraft, Second Life, EverQuest or There, IRS form 1099 may someday soon take on a new meaning for you.

That’s because game publishers may well in the not-too-distant future have to send the forms–which individuals receive when earning nonemployee income from companies or institutions–to virtual world players engaging in transactions for valuable items like Ultima Online castles, EverQuest weapons or Second Life currency, even when those players don’t convert the assets into cash.

Wow! Just imagine the possibilities…why stop with the IRS? HUD could step in to regulate Sim City, Homeland Security could take over the franchises of the Tom Clancy Rainbow Six and similar virtual operations, DoD taking over the Military FPS, RTS, and other geopolitical strategic efforts like Iron Hearts II, etc.

Finally the worst of all…BATF…Bureau of Alcohol, Tobacco, and Firearms…would HAVE to move in and impose strict background checks and permitting for such hallowed virtual weapons as rocket launchers, plasma rifles, etc…right up to the dreaded BFG 9000 itself!

Just imagine the possibilities for this whole new realm of bureaucratic jobs (and the administrative empires that would go with them!). Phew! What a thought!