26 Jul Gamers Selling ‘Pokémon GO’ Accounts Facing IRS Back Taxes
Gamers are now selling their Pokémon Go accounts for thousands of dollars on e-commerce websites such as eBay and Craigslist.
Not only are these entrepreneurs risking losing their accounts, but they also have the Internal Revenue Service on their backs as well. Gamers selling, or even trading, their Pokémon GO accounts can face IRS Back Taxes if they fail to report such transactions.
Pokémon Go’s Terms of Service restrain using the game “for any commercial purpose” including collecting in-app items “for sale outside the app” and attempting to “sell, resell, rent, or lease the app or your account.”
Even if it is considered illegal to sell Pokémon Go accounts, the U.S. Tax Code still requires individuals to pay taxes on all income they receive. In order to avoid IRS back taxes, taxpayers may report their income tax by filing tax returns. Note that this form requires advance payments of tax.
According to Parham Khorsandi, the Vice President of Client Services at Tax Defense Partners, there is no way to avoid the IRS when it comes to selling a gaming account. “The US will tax its citizens and residents on all worldwide income. In this case, it would even extend to selling your Pokémon GO, or World of Warcraft accounts or items,” said Mr. Khorsandi. “Since you have provided a product or goods, in consideration for money, the IRS considers this as income to the seller.”
Whether you are an entrepreneur or just a gamer, it is safe to know that the IRS is preparing Pokémon GO taxes while millions of users around the nation are scattering around neighborhoods hounding for endearing tiny creatures in their smartphones.