IRS Getting Closer to a Virtual Goods Tax

Due to the billions of dollars being transacted in virtual worlds worldwide, the Internal Revenue Service has been taking an increasingly closer look on the taxation of virtual goods. In her 2008 Annual Report to Congress last week, national taxpayer advocate Nina Olson discussed taxpayer issues and issues that the IRS needs to address. For the first time, lack of governance over virtual goods transactions in virtual worlds was actually cited as a major concern.