On Morning Edition, NPR talked with Julian Dibbel (the author of this piece, which we blogged when we looked at the prospects of IRS taxing your gear in an MMO). Dibbell talks about his own earnings over the year by trading virtual wares (he made about $11,000), but he isn't going to be the one who starts reporting this to the IRS. As Dibbell jokes in the recording that he doesn't want to be the guy responsible for having game companies file a 1099 each time a " magic earring drops off of a dragon whelp." I wouldn't want to be that guy, either. But as I was listening to Dibbell, and then re-listening to the piece again I started to think about my own character in Blizzard's World of Warcraft. After all it is tax time, and my account is ten months old, so how would I trace my tax history for the year.

Would my repair bills be tax deductible? Should I keep track of how much gold I spend on them each week? Or are repairs simply an operating expense? Hey, about the 2400 gold I sold an item for and then split with two other buddies, is the 1600 gold I gave to them able to be written off as charity? What defines a work expense in-game and a leisure expense? I use an awful lot of potions raiding, is it possible that those are deductible? The very idea, that Dibbell joked about, Blizzard filing 1099s for boss drops is fascinating. Game Masters would have to lurk in raid zones chronicling drops, filing 1099 forms, because the items, while they aren't all sellable, they do increase the value of the character, and therefore the real money value of the character escalates, too. If the IRS gets involved with this, MMO gaming might need a major overhaul.

Online Gaming, Money and Tax Law [NPR]
The IRS May Be Coming for Your Virtual Wares [Kotaku]
The Taxman Cometh [Terra Nova]

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