Calling Fortnite Cash a Virtual Currency Was an IRS Error

The IRS quickly recognized the need to correct website language that appeared to signal Fortnite and Roblox players were subject to a new disclosure requirement aimed at virtual currency transactions, the agency’s top lawyer said.

The agency on Wednesday removed language identifying Roblox and V-bucks—Fortnite’s in-game currency—as examples of convertible virtual currency. The language was removed hours after Bloomberg Tax asked if gamers who purchased or earned in-game currencies would have to disclose that on their 2019 tax returns.

IRS Chief Counsel Michael Desmond indicated that the inclusion of the video game currencies was a mistake, though he offered ...