© Fox Business Network Investdiva.com CEO and 'Cryptocurrency Investing for Dummies' author Kiana Danial discusses the Bitcoin's performance at the start of 2020 and the demand for the cryptocurrency. Massive numbers of people in the U.S. who play the online video game "Fortnite" may have gotten a tax scare from the IRS, which had indicated that the virtual currency bought through the game could be taxable.
The agency previously listed Fortnite's in-game currency – known as V-bucks – as an example of a "convertible virtual currency," which it defined as a "virtual currency that has an equivalent value in real currency.
V-bucks are purchased in the game with real money.
However, in a statement to FOX Business on Friday, a spokesperson for the agency clarified the policy, which it acknowledged potentially caused confusion for taxpayers.
"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," the spokesperson said.
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IRS TELLS 10K TAXPAYERS TO PAY UP ON VIRTUAL CURRENCY TRANSACTIONS
IRS CLARIFIES SOME CRYPTOCURRENCY TAX RULES
Mentions of the game were removed from the site Wednesday, as noted by CNN.
Under current U.S. tax laws, cryptocurrencies are treated like property.
Taxpayers who fail to pay the taxes they owe on their virtual currency transactions can be subject to penalties and interest – in more serious cases even criminal prosecution.
Fortnite had 250 million players as of May, though that figure includes players from around the world.
The confusion not only comes at the start of this year's tax season but also amid a push at the tax agency to crack down on tax evasion among people who transact in the currencies.
As previously reported by FOX Business, the IRS sent a letter to 10,000 taxpayers last year who engaged in virtual currency transactions, reminding them that they need to report income and pay taxes.
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