I’ve previously blogged about the confusion regarding Linden Lab’s requests to users regarding tax and account information. A big part of the confusion came from people being sent requests for information that they had never been previously asked for by Linden Lab and wondering what it was all about and what exactly they needed to do.
Yesterday Linden Lab posted an updated blog post about the issues, but more importantly that blog post includes links to two very useful FAQ’s:
Linden Lab Official:Required Tax Documentation FAQ
Linden Lab Official:Required Account Documentation FAQ
As you can see there are two links, this is because people can be asked for additional information for different reasons. The tax documentation is a requirement via the IRS and as explained in Linden Lab’s original blog post, will be sent when people reach certain transaction thresholds via processing credit and sales on the LindeX. Linden Lab are required to file a 1099K for US residents who make more than 200 transactions and those transactions in total are above USD$20,000.
If you’re not a US resident then LL are not required to file a 1099K on your behalf, but if you’re getting the tax documentation request it probably means you’ve crossed the US resident threshold and they require the documentation to explain why they didn’t file a 1099K on your behalf. They need to know you’re not a US resident.
One important point to note is that if you have several Second Life accounts, their combined activities are counted. There are more important points to note, merchants should familiarise themselves with these requirements as one day, you may need to provided information to Linden Lab.
Another important point to note is that the 1099K Linden Lab file is not the same one Paypal will file. There is going to be some double reporting, I’m not at all sure what people will have to do in these circumstances but I’m sure the IRS will be able to help.
Whilst looking into this issue I discovered this was a standard threshold on services such as Paypal and Steam too, so this is something that has been on the cards. The difference was that Paypal and Steam provided a lot more information on this matter, so it’s good to see Linden Lab providing a lot more information now.
Continue reading “Linden Lab Provide Tax & Account Documentation FAQ’s”

