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Pamela Galli

New Tax policy??

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Did you receive an email, with a form attached to it, purporting to be from Linden Lab requesting all of this information?

It will be a "phishing" email - and should not be responded to.

As you say, you have already provided Linden Lab with all the information they already need regarding your account.

Edited to add:

If in doubt, never respond to emails. Instead go separately to Support, and submit a ticket.

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No the request is legit. I got a support ticket where LL asks for this info. Apparently the ticket is already a week old, If I would not have looked at the support page just now I would not even have known about it. Apperently if you cash out a certain amount they will block your paypal transfers till you give them a copy of your ID. According to my goverment I should only hand out my ID to the goverment, employers and financial institutes and not a private company that who knows how they will store my ID and use it for who knows what. LL has not like a clean reputation when it comes to competence and security...

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Flew Voom wrote:

No the request is legit. I got a support ticket where LL asks for this info. Apparently the ticket is already a week old, If I would not have looked at the support page just now I would not even have known about it. Apperently if you cash out a certain amount they will block your paypal transfers till you give them a copy of your ID. According to my goverment I should only hand out my ID to the goverment, employers and financial institutes and not a private company that who knows how they will store my ID and use it for who knows what. LL has not like a clean reputation when it comes to competence and security...

I really do learn something new every day.  I suppose we all do.

Linden Lab would feel they have a legitimate reason for having access to certain ID, although in the end we are not employees of LL, even though some luckier ones may be making quite a nice income from what they do in Second Life.  As we are liable for our own tax returns, I see no good reason for LL having our national insurance numbers, etc., although I can fully understand some form of ID is necessary, to lessen the incidence of Linden Lab being dragged into a potential fraud/money laundering case.

Nonetheless, I understand how you feel about how your ID/private details are stored at Linden Lab.

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Well there is more to learn.

If you have objections to handing out a full copy of your ID then they will simply ban you including your access to your own intellectual property.

 

Support:

Due to the volume of your process-credit requests in 2014, we are now required to collect certain pieces of customer identification. This is not a request we make capriciously; it is done because we are required to obtain this information.

As soon as you meet the above requirements, we will release your process-credit requests.

If you do not submit these documents before the 30-day deadline, or choose not to comply with our request, we will place your Second Life account(s) on hold, send you one final payout for all USD on your account(s), and terminate your future access to Second Life. If you do not want to send us the required documentation, please let us know and we can terminate your account(s) immediately and send you a final payment. We would rather have you continue as a customer, but if you refuse to comply with the new requirements, we have no choice but to terminate your accounts.

Please let us know how you wish to proceed.

 

Nice huh. So me as a paying customer since 2009 basically gets blackmailed into handing out my ID with a nice response like this... or I will get terminated.

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Flew Voom wrote:

Well there is more to learn.

If you have objections to handing out a full copy of your ID then they will simply ban you including your access to your own intellectual property.

 

Support:

Due to the volume of your process-credit requests in 2014, we are now required to collect certain pieces of customer identification. This is not a request we make capriciously; it is done because we are required to obtain this information.

As soon as you meet the above requirements, we will release your process-credit requests.

If you do not submit these documents before the 30-day deadline, or choose not to comply with our request, we will place your Second Life account(s) on hold, send you one final payout for all USD on your account(s), and terminate your future access to Second Life. If you do not want to send us the required documentation, please let us know and we can terminate your account(s) immediately and send you a final payment. We would rather have you continue as a customer, but if you refuse to comply with the new requirements, we have no choice but to terminate your accounts.

Please let us know how you wish to proceed.

 

Nice huh. So me as a paying customer since 2009 basically gets blackmailed into handing out my ID with a nice response like this... or I will get terminated.


Why is it so difficult for you to understand, or at least it appears you are thinking this way, that Linden Lab has no choice in this matter. 

It is not a matter of them "blackmailing" you.

When you do business with a company in another Country, that business still has to comply with the laws of the Country they are in.

"The Bank Secrecy Act contains numerous anti-money laundering and anti-fraud provisions. These provisions place certain requirements on “Money Services Businesses” (MSBs) and money transmitters, including registration requirements; requirements to collect information on any potentially suspicions transactions and keep extensive records on users; and requirements to report suspicious transactions to the federal government. A regulatory change applying the Bank Secrecy Act to virtual currencies, as FinCEN’s did, has some significant effects on any business relying on virtual currencies."

"........exchangers (who have the ability to exchange virtual currency for real currency) and administrators (who have the ability to issue or withdraw virtual currency) are MSBs. They are subject to strict regulation. " (my bolding)    LINK

Now while LL may not be stating specifically what steps they are taking to protect your information, as a Financial Institution, which is among other things one of the things they are, there are laws that govern how they may use your information and how they must protect that information.

Whatever my personal opinion may be about these laws, they are still the Law.  

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Okay a few points.

First, I was not even aware that there was some kind of quotum for transactions. I have not received an advanced warning that I was reaching a quotum limit. If I would have know I could have chosen to not cash out any Linden Dollars anymore.

Second,  The privacy policy where support is directing me to has no mention of gathering personal date such as a full ID copy including social security numbers, it mentions some 'personal data' in general. It has no mention of any liability towards LL to keep my ID safe. They speak in terms of 'reasonable measures' to secure personal info. If anything goes wrong with that security (I can sum up a few hypotetical scenarios), I can not hold LL responsible in legal terms. There is no mention at all how the private data is being stored and secured and who has access to it. It does mention that LL is allowed to store this data at any location where LL has an office, so my ID can be stored at mutliple locations. It also does not mention if the stored IDs (not just mine) is in some way connected to a network. The policy also mentions that even if I close all SL accounts then LL is allowed to keep the ID copy on file even though I have no relation anymore with SL or LL.

Third, even if I choose to cancel the paypal transaction and say to LL 'never mind', then apparently I will still get banned even though I choose not to use the Lindex anymore (a loyal customer that did nothing wrong nor violated anything). So me a resident in good standing since 2009 is being treated like this where they threaten to terminate my accounts while I was not even aware if this quotum and I have been doing monthly cashouts for years to the same 'verified' paypall account. If I would not have done the last payout then all would have been fine without me handing over a copy of my ID.


I have no problem to give some form of identification to LL as I have nothing to hide from LL nor the IRS in my country, but a direct copy of my ID including thus the social security number is a drastic demand, a demand that I refuse to comply to so far from any private commercial company, because according to the goverment in my country I am not obligated to do that. Paypal has a copy of my ID any goverment can check my paypal transactions. My transactions here at SL are linked to that paypal account. If I would want to hide from the IRS or something I couldn't already.

I am also aware that LL has to do this and that is not their idea, but the impementation of this new policy and how I am unsuspectedly being confronted with this and even risk being banned (while I have done nothing wrong other then being a long time resident and merchant/creator) I don't consider to be good business standards/practice. If they would have notified  me on the Lindex page about this then I could simply not have cashed out. They are putting me in the position now to hand out and ID copy because their lack of warning/notice. Hell, If I would not have looked at the support page a few days ago I would still have been wondering what happend with the paypall cashout... and later why I am banned .. only because I did not see the support ticket.


Atm I am undecided yet if I will cooperate as I have strong princibles (as you notice) about handing out ID copies to companies (specially with a lacking privacy policy). I may even quit SL (after I coppied my property and creations to my HD) and move on and fully focus on developing games now... which I already was doing.

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I understand that you don't want to give out your ID. I'm not against you on this. I don't like handing out my personal info either.

As far as "not obligated" by your Country to hand out personal info, can you open a Bank Account in your Country with out doing that?  Did you have to provide PayPal with the info?  Linden Lab as a Financial Institution has to comply also.

I too have reread the Privacy Policy and personally feel it could stand some updating.  But there is a bit of a no brainer here, LL has to comply with what ever privacy regulations cover this information.  I'm not an expert on these.  It would be nice if they clarified exactly how they are handling the info in this situation.

As far as you being a "loyal customer," do you think LL is enjoying doing all this?  Personally I don't know all the fine point details of what is going on.  But because of all the complexities of the regualtions I don't blame LL one bit for not trying to explain to each and every person who does business with them every detail.  It would just get ridiculous. 

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By providing this information to LL (filling out the required W-9 form, etc), would Linden be turning over previous years' earnings as well?  I made well under the required 20K this past year, nor did I have the 200 cash-ins, but was sent the letter as well.  Do any of you tax-savvy people know if we would be held accountable for back taxes? 

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Persia Christensen wrote:

By providing this information to LL (filling out the required W-9 form, etc), would Linden be turning over previous years' earnings as well?  I made well under the required 20K this past year, nor did I have the 200 cash-ins, but was sent the letter as well.  Do any of you tax-savvy people know if we would be held accountable for back taxes? 

My guess would be they will only automatically be reporting earnings from this present time forward.

However the IRS could ask for back information and yes, if you get caught for not reporting the IRS will hold you responsible. 

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I asked my accountant about this and was told unless I were to get audited the IRS wouldn't request it. Linden Labs wouldn't send it on their own because the tax season for previous years have already closed. Having said that, just make sure you claim all your income and treat it as a business and you've got nothing to worry about. My biggest confusion with them was since I already claim all of my income as income to my business, I was concerned about being double taxed if I received a form and claiming it as receipt income. Luckily I have an awesome accountant who handles all of it so I'm a bit less stressed about it.

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I think the important thing for folks to note is this:

A W-9 form is required when you work as an independent contractor for a company and they pay you. If you earn more than $600 in one year with one company they will report this to the IRS and the information you provide on the W9 allows them to do so.

Not only do you have to fill in a w9 form, you have to prove you are you with some photo ID with the exact info on the w9.


If you are nearing that $600 they WILL hold your money. A ticket is put in your file and you might possibly (some folks have and some have not) get an email telling you why your money hasn't arrived at Paypal.

There has been some ball dropping on the part of The Lab -- namely in the communication area (other threads verify this). If your money is in dollars rather than lindens it appears that it becomes forfeit if you do not comply with the W9 request. So folks that make "about that much" in  a year  and don't want to deal with the paperwork or privacy issues could choose not to cash out and wait until the year starts anew.


And of course this was ALWAYS taxable income. It should have been added into yearly income as business earnings :D.  If you make a LOT in SL then it seems likely that the IRS might do some back taxes checking to see if you claimed similar income in previous years. But mostly this is about getting folks to claim it from this point forward. That is pretty easy to see.  

 

 

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