We might just all be screwed ...

The premise is as follows in the audio clip linked below:

Soandso gets a +1 sword in random MMO X. He sells that sword to someone else for $100. That is income and the IRS will want its cut.

Worse yet, under the IRS barter rules, if I hire a plumber to fix my pipes and pay him by painting his house, we are both liable for taxes on the fare market value of the service provided. Since that +1 sword in the game has a fair market value, if I buy it for in game cash (which also has a fair market value) or trade it for another item, we may both be on the hook to the IRS for the value of that trade. You also have to worry about gambling taxes when you 'win' an item with that fair market value in the game.

Everyone got there 1099s from SoE already, correct?

Ultimately, this is had yet to be ruled on by the IRS, and we all know how reasonable they always are when they decide something so that leads me back to the title of this message.

http://www.npr.org/templates/story/story.php?storyId=5199966