The US Internal Revenue Service (IRS) has deleted an advisory on its website which advised that Fortnite in-game virtual currency should be reported on tax returns.
The tax return guideline, posted by the IRS regarding virtual currency in the popular online video game Fortnite, has been deleted. The advisory, which dates back to at least October of last year, is the first time the agency has ruled on video game currencies.
The policy, which affects Fortnite's V-bucks that are purchased with real dollars, is based on what the IRS enforces on bitcoin, ether and other cryptocurrencies.
Despite the deletion, experts say that transactions involving video game currencies will still need to be reported eventually under a new question the IRS is including this year on tax forms.
The day after the deletion, IRS Chief Counsel Michael Desmond said that the inclusion of video game currencies had been a mistake. He stated: "It was corrected and that was done quickly — as soon as it was brought to our attention."
A formal statement was eventually released by the IRS on Friday, saying: "The IRS recognizes that the language on our page potentially caused concern for some taxpayers. We have changed the language in order to lessen any confusion. Transacting in virtual currencies as part of a game that do not leave the game environment (virtual currencies that are not convertible) would not require a taxpayer to indicate this on their tax return."
Jerry Brito, executive director at virtual currency think tank the Coin Center, argued on Twitter: "[The] definition of virtual currency in IRS guidance would still encompass these. I don't think they realized the consequences of their 1040 question."
Neeraj Agrawal, a spokesman for the Coin Center, added: "Every major online game has some kind of in-game economy at this point. It's a very popular mechanic."
