Class action suit: SL Businesses VS Griefer

In the "Full analysis" value was set when someone bought that L$ from someone else. They did not have to buy it, but to them it was worth something. It had a value.

Anything can have value. It does not have to be something you can touch or have a usefull purpose. If there is a demand for it than it has value.

That's true. Personally I wouldn't pay a cent for a Fabergé egg, but for a collector it's worth millions of dollars. And if one is reported as stolen, the authorities will deal with this case according to the value it has among collectors.

What makes it different is that unlike a poker game say, you are nor playing for REAL money. You are playing for $L, which the last time I looked, did not feature on any Internationally recognised ERM (Exchange Rate Mechanism). The very fact that the exchange for $L is provided by LL means that it is not currency, regardless of whether you are able to exchange it to real money or not. It's 'value' (which is transient) is decide by LL NOT any official state bank.

This is a platform, a sim, a GAME!

OK, so I'm a professional online poker player. I spend time and effort cheating chips out of people and using my skill (not chance) I am able to make a good, regular profit for my play. Do I have to pay taxes on what I make? NO! Because it is the result of gaming which thankfully, is not tax deductable.

I very much beleive that SL is a game in which you make decisions that may or may not cause you to make an IN GAME profit. Equally, you could make an IN GAME loss. Presumably those who do pay taxes also could write of losses and expenses in their tax accounts?

I am of this opinion, and have not heard an argument yet that fully convinces me otherwise. The very fact that people do pay taxes, and that forms exist for the payment of tax on 'profits' made from SL, does not necessarily mean anything under law. The ONLY way to find out under law, is for some test cases to start to appear.

I would fully argue that these profits are in fact 'winnings' regardless of the method by which they were gained in SL.

I welcome any comments about this. I find this topic fascinating and I'm sure a lot of you have valid arguments / opinions to post up on here. I'm also sure that many of you are secretley hoping that my opinion could be deemed as correct under law as this would mean extra for us all.

Actually, in the United States, you do have to pay taxes on gambling winnings by declaring them and attaching a Schedule G to your tax form. Failure to pay taxes on gambling winnings and failure to declare all earnings is tax evasion.

In the event someone needs tax advice they probably shouldn't talk to you.

Fine, go ahead.



No offense taken - yet I am not 'harping', merely pointing out an opinion (mine but not mine alone).



I have read your posts with interest, however, I'm from the UK, so any opinion on the legal aspects are founded in UK law, which thankfully, I know a little about but more about than US law, which by international comparison could be said to be the most unfair set of governing rules and regulations ever imposed on a population in the whole of history!. After all, in the states you could sue someone because their dog threw up on your shoe and the courts would take your claim SERIOUSLY!



I'm aware of that and my question was there to illustrate the point that yes some people do.



I disagree, if it's gaming income (in the UK) there is nothing to declare and is not illegal.



Absolute codswallop! Constant attempts? Inciting others? Get real, this is a FORUM for discussion and this thread is supposed to be about whether SL business owners could theoretically sue the greifers for loss of business income in a class action suit. My comments are merely here to further the debate. You Yanks gonna try take away my right to free speech too?



But they are not under UK law, which is where I am and therefore the legal point of view from which I speak.



Point taken and forgive me for my MINOR error in tax terminology. However, do not make assumptions about my knowledge or experience from such petty mistakes.




Of couse I've filed Income tax. Yes I am sole shareholder of a UK registered Limited company, registered in 1999. I have quite a lot of experience under UK law about business management and taxation. I'm also sure that my accountant would disagree with me and follow your argument, but that doesn't make it right!



I'm not quick to scold anyone. This is a DISCUSSION thread and I beleive I am contributing. I also believe that inane comments like the one you are referring to have no place here, unless, they elaborate on their opinion just like you have done here.



I have done plenty research in my time on UK laws of taxation and therefore will ignore the comment about 'blindly spout...blah blah'. Again you are making way out there assumptions about what I do or do not know.



Awww, bully for you. Now go make yerself a peanut butter sandwich and sit back in smug self satisfaction.



Again, wild assumption based on no fact at all. You think just telling me to shut up is making you look anything other than silly. WAKE UP! This is a forum and I have as much right as you do to join this discussion, regardless of what you ASSUME to be my level of knowledge or experience.



I don't feel bad at all, yet I do not believe that your post had any other intention, after all you have said nothing about whether you think a class action lawsuit could be brought against the griefers by individual SL owners. My opinion is that No it couldnt. And in stating that opinion other intersting debates have been sparked such as does $L have any true value, do you have to pay taxes, etc.

I have opinions that are true to me and others. I do not make untrue statements but do point out a point of view and welcome all comments whether they are in defense or attack on that stated opinion.

So you've set nothing stright at all other than what is very clear. My opinion gets up your nose. Awww sorry for that. Here's an assumption for you - you haven't read the title question of this thread.

Actually, In the UK, you do not have to pay taxes on gambling winnings by declaring them and have no form to attach to your tax form. Failure to pay taxes on gambling winnings and failure to declare those earnings is NOT tax evasion.

In the event some in the UK needs tax advice they should probably go see a UK tax advisor to confirm that what I have just said is true.

Thanks John for your elaboration. I can find no argument with your point of view other than NO, 'winnings' from Internet 'play' can not be (IMHO) classed as business revenue and I would be prepared to argue that.

I am very interested in peoples opinion about this and fully agree with your statement that this is a grey area in so much as US, EU or UK law is concerned. There are no real precedents to follow. Unfortunately in the Poker world of which I know a certain amount, the current US administration is clamping down on players who make profits from internet play. They are already due to stop US citizens funding their online bankroll with the use of credit cards. Many will not be able to play at Party, Pacific and others since they have declared that they will no longer accept players from the US due to this draconian regulation. Other sites notably fulltilt and Bodog are set to challenge the ruling. Watch this space.

If you make more than £5,000 from SL, then you'll get your opportunity to do exactly this. Once you've withdrawn that much money through Paypal, they're obliged by european law to notify the inland revenue about your income.



Get a better financial advisor. e-commerce - even when you're performing that commerce through offshore servers - is not as grey an area as you seem to believe.

and pretty sure it's the same in the UK. Unless the winnings specifically say "Tax exempt" or similar than you legally should declare them. That's why in horse racing, if memory serve's, you can either pay tax when you place the bet or when you win ( pretty sure it's something like that).

Firstly, I don't make any £sterling form SL. I MAKE $Lindens.

Second, Paypal is a registered CASH exchange so that people can trade on any internet application whether that be Ebay or SL and deals in REAL CASH only not $L. That is my point, can $L profits be deemed as RL income?

Lastly, my financial advisor who is also my accountant would argue from your point of view. Yes I have no doubt that the IR would be interested in creaming more tax out of me. Yet I have had enough of giving to the state and getting nothing back in terms of service. I would like to EXPLORE THE POSSIBILITY of arguing that these profits are the result of gaming and therefore not taxable (I believe this is the correct term NOTE: CHOSEN FEW!).

I'm sure that the IR has more power than anyone to fight this argument, yet I'm suprised at the level of subservient enslavement that many of you are prepared to accept without challenging or supporting an alternative point of view.

I now pay well over half of my annual income to the treasury in Income and other taxation. I have very little in the way of additional income and I struggle to pay the inflated prices for goods and services we do here in the UK. London is the most expensive place in the world to live now!

In the early 18th century France particularly Paris was in a very similar predicament. Coins were in short supply, most people were poor and had to pay tax on anything they bought be it an apple or pear. One visionary financier, John Law a scot, changed all that. He changed the corrupt and antiquated taxation system to one that was income based and introduced billets d'etat to counter the money shortage. In one decade alone France became the wealthiest economy in the world.

Cmon people, during the last decade I have seen taxes and prices rise to an intolerable level and the internet become more and more regulated. What started as a fantastic 'space' to explore is now fast becoming an extension of the state. Information should be free!

Mahatma Ghandi said '...be the change you want to see in the world'

Actually it was changed by the Goverment when they came into power and you no longer have to pay tax when you place a bet. My god, where have you been?

That's odd as a quick search of irs.gov clearly states:

"Gambling winnings are fully taxable and must be reported on your tax return. You must file Form 1040 and include all of your winnings. Gambling income includes, but is not limited to, winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and also the fair market value of prizes such as cars and trips."

Topic 419 - Gambling Income and Expenses

Render unto Caesar's what is Caesar's.

We're talking UK NOT US law here Elex. By goverment I mean UK Government NOT the Bush administration. My god I feel for you American cousins!

Income, expenses and assets include anything of value.

Anything of value is of interest to the tax board.

In any country.

Period.

If you gain anything of value and do not report it, you are evading your tax payments.

Whoops. I feel for you, too. Many apologies to our cousins in the 51st state.

Lol - politically, yes I have to concede that our Prime Minister has sold us to Bush as just another State. Bring back Dame Thatcher and Ronald Reagan - ROFL

Thankfully, we have something in Europe which is devoid in the States. An advanced and Interesting culture.

My company makes sterling by trading rights to those lindens. Now, I'm not going to suggest for one moment that the IR are about to start taxing in-world L$ transactions (at least... not for another decade or more) ...or that they're going to concern themselves with the folks cashing in a trivial amount of L$ from time to time... but the argument put earlier was "Your companies are not real, SL is just a game", whereas my counter-argument was "my company is _very_ real, and SL is my current trading platform of choice".



The internet is not a place. It's not a nation. It's not an existential plane of existance with it's own laws... It's just a neat way of making computers talk to each other (and, by proxy, a really neat way of making people talk to each other too).

The suggestion that you should be exempt from tax - or any other real-world legislation - just because you're trading via the internet/SL is as rediculous as saying you should be exempt from tax because you conduct your sales by telephone... or exempt from tax because you only sell things through the medium of television. That's not how it works.

Start your revolution in 1st Life; that's the only place where it counts.

Actually folks, Captain is partially right on that one. In the UK you do not pay tax on lottery, Betting Exchange, or Horse bets etc.

However in the USA I believe you do but I can only present an honest view from a UK/EU viewpoint.

But Captain, I know this is a little off topic but now and again I day trade the stock market and have used www.advfn.com as an information source. If we exclude options and warrants there are three main ways of trading, ordinary shares, spread betting, and contracts for difference. (Known as CFDs)

CFDs and share profits are taxable and for some time it was assumed spread betting was tax free as a type of bet. Spread bets have some disadvantages in terms of trading because you are not trading on the book price but a wider spread set by the spread bet provider. But because profits were considered to be tax free traders used them.

However the IR launched several test cases a few years ago and where it could be shown traders were using them consistently the IR stepped in and taxed them.

If you do a search on ADVFN's premium BB you will find some old threads that go into this. That would be my own UK view too but dyor as they say

Regards

John

OMG another US citizen!

Actually, in the UK, winnings made from gaming / gambling online or otherwise are not considered taxable by the IR due to a bill passed when the current UK government came into power.

Full stop.

Thanks for your post John. I know we're a little off topic here yet people are just trying to clarify facts about Law without realising that Laws differ across international boundaries.

I take your point about Spread bets on markets but remember, these are 'investments' on RL registered market options. There is no FICTIONAL currency involved, all bets / investments are done with REAL cash.

That is the basis of my exploration into whether profits made in $L could be deemed as taxable. My argument is that they are the result of a gaming experience and should thus fall under gaming law.

My suggestion is about SL profits being deemed as 'winnings' due to:

1) SL is a gaming experience, a simulated world.
2)Profits are not made in any recognized currency at the time of trading

I'm well aware of the nature of the internet (see my previous post) and happily agree with you that it is just a network of RL computers. But many are not of this opinion and they do view it as a 'space'.

Hopefully I am starting a RL revolution and one that will count for all of us!

(Emphasis mine)
Actually, you're incorrect. I live in a place where there is no income tax, no taxes at all, other than Land Tax and Duties.

Absolutely correct.

Shep, u ever been to Dubai, Lusail, Cayman Islands, Channel Island, Isle of Man?

It can't really work that way, can it?

If it did, then someone who played World of Warcraft would have to report to the IRS if they killed too many goblins, because after all, WoW gold is saleable (and thus has value). Ok, it's not worth very much, but on the other hand some folks kill a lot of goblins

Similarly (and this is a more honest question) - suppose someone completed the "HTML on a prim challenge" from a while back and claimed the free island for a year that LL were offering. Do they have to pay tax on an extra $195/month because their favour from LL has that value?