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Patriot Act Letter from LL?


Pamela Galli
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KarenMichelle Lane wrote:

Linden Lab / Linden Research may certainly request additional information when your Cash-out [Process Credit] activities exceed the US Tax Reporting Threshold per annum [usually $600.00]. This triggers the IRS reporting requirement by Linden Lab to send out a MISC 1099 Income document to the legal account holder by the 28th of January. These 1099s are also reported electronically to the IRS by February 28th of the next tax year or by paper transaction by the end of March of the next tax year. So the 2013 1099 Misc reporting period is coming up now. The Form W-9 (for U.S. residents) and Form W-8BEN (for non-U.S. residents) forms are the correct forms for supplying this information to Linden Lab.

Hmm.  I'm a non-US resident who has cashed out considerably more than US$600 in the last year.   I've not received any such form.

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I contacted Linden Labs Billing via phone and they said this is a legit thing.  Basically we have to submit W9 forms with our taxes now, and its a new yearly thing the IRS is doing apparently.

 

People on this thread are saying this stuff is a scam or whatever.  It's not.  I've already confirmed it's legit with Second Life Live Chat and the on-phone Billing Department.

 

I submitted all the requested information they asked for and hope they finalize and close this case and everything goes back to normal.

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Earalia Nolan wrote:

I contacted Linden Labs Billing via phone and they said this is a legit thing.  Basically we have to submit W9 forms with our taxes now, and its a new yearly thing the IRS is doing apparently.

 

People on this thread are saying this stuff is a scam or whatever.  It's not.  I've already confirmed it's legit with Second Life Live Chat and the on-phone Billing Department.

 

I submitted all the requested information they asked for and hope they finalize and close this case and everything goes back to normal.

Linden Lab / Linden Research may certainly request additional information when your Cash-out [Process Credit] activities exceed the US Tax Reporting Threshold per annum [usually $600.00]. This triggers the IRS reporting requirement by Linden Lab to send out a MISC 1099 Income document to the legal account holder by the 28th of January. These 1099s are also reported electronically to the IRS by February 28th of the next tax year or by paper transaction by the end of March of the next tax year. So the 2013 1099 Misc reporting period is coming up now. The Form W-9 (for U.S. residents) and Form W-8BEN (for non-U.S. residents) forms are the correct forms for supplying this information to Linden Lab.

Get these documents here:

Info: http://www.irs.gov/uac/Form-W-9,-Request-for-Taxpayer-Identification-Number-and-Certification

Form: http://www.irs.gov/pub/irs-pdf/fw9.pdf

Info: http://www.irs.gov/uac/Form-W-8BEN,-Certificate-of-Foreign-Status-of-Beneficial-Owner-for-United-Sta...

Form: http://www.irs.gov/pub/irs-pdf/fw8ben.pdf

This is what Linden Lab should have sent you in their email. Not an Adobe EchoSign request.

After you have completed these forms you may scan & email them to Linden Lab or fax them or snail-mail them.

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Innula Zenovka wrote:


KarenMichelle Lane wrote:

Linden Lab / Linden Research may certainly request additional information when your Cash-out [Process Credit] activities exceed the US Tax Reporting Threshold per annum [usually $600.00]. This triggers the IRS reporting requirement by Linden Lab to send out a MISC 1099 Income document to the legal account holder by the 28th of January. These 1099s are also reported electronically to the IRS by February 28th of the next tax year or by paper transaction by the end of March of the next tax year. So the 2013 1099 Misc reporting period is coming up now. The Form W-9 (for U.S. residents) and Form W-8BEN (for non-U.S. residents) forms are the correct forms for supplying this information to Linden Lab.

Hmm.  I'm a non-US resident who has cashed out considerably more than US$600 in the last year.   I've not received any such form.

The statute threshold for US residents is $600 USD but that is specifically related to income for employment services. US Banks report all transactions in excess of $10,000 to the IRS.  The Patriot Act financial reporting thresholds [which enhance the BSA's previous reporting thresholds] seem to indicate that $10,000 and above must be reported as they defer to the existing BSA limits. Currency Transaction Reports regulations may be the reason Linden Lab requires this information.

 

Sec. 365. Reports relating to coins and currency

Section 5331 ("Reports relating to coins and currency received in nonfinancial trade or business") was added to the BSA. It makes anyone who does business file a report for any coin and foreign currency receipts that are over US$10,000. The report must contain the name, address and any other identifying information so required by the U.S. Secretary of Treasury; the amount of coins or foreign currency received; the date and nature of the transaction and any other information required by the Secretary of Treasury. However, should a transaction be made that involves foreign currency then the report does not need to be made, and instead reports should be made through the relevant regulations covered under 31 U.S.C. § 5315. Transactions that are made entirely outside of the United States are also not covered under 31 U.S.C. § 5331. 31 U.S.C. § 5324, which prohibits the structuring of transactions in such a way as to evade reporting requirements, was also amended to include the reporting of any coin and foreign currency receipts over US$10,000.[44] The term "nonfinancial trade or business" was made to mean "any trade or business other than a financial institution that is subject to the reporting requirements of section 5313 and regulations prescribed under such section."[45]

 

 

 

 

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Ceka Cianci wrote:

they will not get any more information than i have already given them..

i'm not flipping through hoops..it's on rrecord  they best look for it if they want it..i'm not giving it again..

as far as the fed goes.. they can shove their partriot act right up their Azz for all i care..

 

 

Basically my thinking as well, Ceka.

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Innula Zenovka wrote:


Orca Flotta wrote:

For me this sound more than fishy and I have a couple questions and comments:

1) are all LL customers with a credit card supposed to get  that letter or only US citizens?

2) I'm living in South Africa and holding an SA ID card, but am a citiizen of the Federal Republic Germany by all means. So I can hardly be considered an American patriot let alone fall under that act. Or can I?

3) If this letter turns out to be legit and I get one too ... I guess it'll be the end of my glorious career in SL. Baibai. No sane person should ever get along wih such bullcrap. Obama, the IRS, LL and the NSA are obnoxious and repel me to no end!


The Internal Revenue Service (IRS) requires Linden Lab to collect and retain Form W-9 (for U.S. residents) and Form W-8BEN (for non-U.S. residents) at certain transaction volumes. If you reach the transaction threshold and we do not have your completed and signed W-9 or W-8BEN on file, we are required to withhold funds from your account (at the current rate of 28% of your gross amounts received). Additionally, for U.S. residents with 200 or more transactions with a total amount in excess of $20,000 in a calendar year, we are required to file a Form 1099-K with the IRS reporting those transactions for that year.

If you are required to submit a W-9 or W-8BEN form to us, we will email you before the end of the year with instructions on how to do so. Please follow the instructions to complete and submit the required Form W-9 or W-8BEN within thirty (30) days of receipt. You will only need to complete this paperwork once unless your information changes from year-to-year. If you do not receive an email from Linden Lab, we do not need you to complete these forms.

So the IRS will be requiring information from some people, but not many, and the timing of this post seems suspicious.

I have to say that, while I dislike paying tax on my earnings as much as the next person, I can't really agree that "no sane person should ever get along with such bullcrap."

The IRS info that is posted above (and which we also discussed in the Merchant forums) doesn't concern me; it's the reference to the Patriot Act in the email that Pamela received that has me a bit perplexed.  IRS regulations for financial income is one thing; having to supply identifying information to be part of the NSA database is another.

As I understand it, the IRS letter was sent to people who withdrew money from SL ie. earn money withing SL.  If this letter is legit, it will be interesting to see how many people and who receives it.

 

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Czari Zenovka wrote:


Ceka Cianci wrote:

they will not get any more information than i have already given them..

i'm not flipping through hoops..it's on rrecord  they best look for it if they want it..i'm not giving it again..

as far as the fed goes.. they can shove their partriot act right up their Azz for all i care..

Basically my thinking as well, Ceka.

...enrolls Ceka & Czari into the Witness Protection Program thru a loophole....

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KarenMichelle Lane wrote:


Czari Zenovka wrote:


Ceka Cianci wrote:

they will not get any more information than i have already given them..

i'm not flipping through hoops..it's on rrecord  they best look for it if they want it..i'm not giving it again..

as far as the fed goes.. they can shove their partriot act right up their Azz for all i care..

Basically my thinking as well, Ceka.

...
enrolls Ceka & Czari into the Witness Protection Program thru a loophole....

Well at least I'll have good company...errrrr...wherever. ;)

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I just got a reply from Tommy Linden on my case.  He said everything is in order and things will be back to normal now.

 

If anything else bad comes up I'll let you know but SEEMINGLY the issue has been resolved now.  I hope my responses to this thread help anyone else who is freaking out right now about what's going on with their Second Life account.

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Earalia Nolan wrote:

I just got a reply from Tommy Linden on my case.  He said everything is in order and things will be back to normal now.

 

If anything else bad comes up I'll let you know but SEEMINGLY the issue has been resolved now.  I hope my responses to this thread help anyone else who is freaking out right now about what's going on with their Second Life account.

Please define "Everything is in order" and "back to normal."

 

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Ah, I thought it might be something more interesting. Hhhm, terrorist using houses for communications or memorizing things, the method of loci or whatever. They want information on why you put some pattern on a couch, which happens to have been a visual pattern that is used by terrorists as a unlocking photo thingy like a bar code.

Hair makers may be more at risk though.  I saw a tutorial that uses the bar code generation or font in gimp as a base for motion blurring to get hair textures! I used something else when I was experimenting with hair. Wow, sounds like hair is a drug! lol. 

And you thought the Peoples Elite and Secret and Popular Front for the Liberation of Cornwall was some sort of crazy joke! They found humor or a muse in a new object you made, that's all.

Now, they secretly plan to seek you out and kill you with bad food, british food...yes, but I mean really bad food that is more dangerous than just known in the US to be bland.

Meanwhile, the homeland security people are sending the armed EPA soldiers (yeah they have guns to find pollutors and raid places that dumped pollutants lol) to raid your kitchen and arrest you and seek out your sofa for evidence because they think you are involved! Just in case you may have had the same pattern there and used it to communicate or provide unlocking code access!

THen, we hear of you in a bay...maybe closer to home, england right? Ah, they lock you in the mens pub bathroom stall letter H! Maybe a really damp place in Ireland? Yeah, they have political stresses with Ireland...yeah, so they put you there in a tiny cold damp place and lock you up with people who want to kill you because they swear you are a spy that was relaying thier codes and you must know the mole! One tortures you with stress positions, the other tries to start riots and chases you around in the damp cold. Sadly, after it is all done we hear of your release. Yet, no one you know is in SL anymore and they upgraded blender like 10 times and changed every single last button and moved to a new way of modelling using PLURBS that have all sorts of cryptic words, buttons and features to make very real looking objects. Object that have emotions and can break, so as you are working you have to make sure you don't turn the rotation tool to fast or a PLURB will shout at you and hide itself and tell other PLURB objects how mean you are. Yet, if you don't toughen them up they will not last long and break when your customers use them!

Silly government policies, death, taxes, and phishing scams are all inveitable these days, huh? The funny thing is they seem alike, and are perplexing but also seem to make things work better to some people while others want to rid the world of them! Steve Jobs saying death is a killer app, I think....maybe I misquote...oh well. At the same time, he wants cancer eradicated.

Either way, keep on fighting the power establishment...I mean, really, they should lower thier prices with all the cold weather and electric space heaters in use these days!

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Earalia Nolan wrote:

@Perrie Juran:

My account was put on hold for Processing Credit.  That was lifted.  Also if I didn't comply within 30 days they would either shut down my account apparently or force tax me 28% of the funds I tried to withdrawal. 

This makes perfect sense.

The 28% withholding clause is a mandatory corporate remedy that may be imposed when a lack of current & valid tax reporting information is on file [the W-9] with the payer entity [the corporation] in this case, Linden Lab.

With a properly executed W-9 on file then the end of tax year 1099 Misc [income] documents can be sent to the receiving entity [account holder or business] and the IRS. As Linden Lab in many cases has no other identification on file for older accounts, when these [potential] earning thresholds are met then this seems to me to be the only way to incentize the account holder to supply a W-9. If Linden Lab does not collect this information then they can experience significant tax penalties and criminal prosecution.

In all cases, US citizens will receive the 1099 Misc Tax Income Statement at the beginning of the year for the previous tax year and need to include this in their income declarations when they file their US Tax Returns. Of course you may offset this income by all your SL expenses related to product development or services rendered.

~~~~~~~~~~~

My earlier issue with this thread is the way a corporate entity [Linden Lab] notified the account holder of a tax reporting requirement. The Linden Lab Billing department is grossly in error in using a "masked" alias [Tommy Linden] to notify an account holder of a mandatory tax reporting requirement. Just because the owner of the account is not 100% verified to the Linden Lab business office does not excuse this mistake.

Further, this gross mistake opens the company up to potential harassment lawsuits. [My tax attorney LHAO when I called him about this.] Surely Linden Lab has a CPA or tax attorneys available to them if not on staff then through their business accounting department. If Tommy Linden is in the accounting department, then he needs to get current on his business accounting, business accounting ethics and corporate tax liability management knowledge. These kinds of mistakes can expose companies to fines as well as punitive damages.

 

P.S. Darn it, I'm semi-retired from all of this business accounting nonsense. LL needs to stop getting my dandruff up!

P.S.S. This kind of tax reporting has existed in the US since 1970. All the latest updates to the Patriot Act did was cause the IRS to expand the classes of businesses affected and notify them of the requirement that they need to start reporting cash disbursements. Linden Lab now "officially" fall under the class of business entities required to report potential income. Citing The Patriot Act in the email to the various account holders was both non-applicable and wrong. The IRS requires this information.

 

 

 

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I agree, this is yet another sad sack LL failure to have the foggiest idea how to run a REAL business. "Tommy Linden" never responded to my email. Live Billing Support had no clue what I was talking about. Nothing in the blog. 

I still don't know why I never got the previous tax letter but got this Patriot Act one. I would think I would get either both or neither.

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Pamela Galli wrote:

I agree, this is yet another sad sack LL failure to have the foggiest idea how to run a REAL business. "Tommy Linden" never responded to my email. Live Billing Support had no clue what I was talking about. Nothing in the blog. 

I still don't know why I never got the previous tax letter but got this Patriot Act one. I would think I would get either both or neither.

Further, I'm really saddened because the more I see documented business practices like this,  it becomes clear that the management in the Linden Lab accounting department is not experienced in real world practices at all. Why does this worry me? Because reporting compliance, while not sexy, is a core competence for any corporate accounting staffer. That same said department is also responsible for creating all the financial accounting reports like cash flow analyses and profit & loss statements. If you can't get the basics correct.... Well you know what comes next.

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KarenMichelle Lane wrote:


Pamela Galli wrote:

I agree, this is yet another sad sack LL failure to have the foggiest idea how to run a REAL business. "Tommy Linden" never responded to my email. Live Billing Support had no clue what I was talking about. Nothing in the blog. 

I still don't know why I never got the previous tax letter but got this Patriot Act one. I would think I would get either both or neither.

Further, I'm really saddened because the more I see documented business practices like this,  it becomes clear that the management in the Linden Lab accounting department is not experienced in real world practices at all. Why does this worry me? Because reporting compliance, while not sexy, is a core competence for any corporate accounting staffer. That same said department is also responsible for creating all the financial accounting reports like cash flow analyses and profit & loss statements. If you can't get the basics correct.... Well you know what comes next.

 

Good point.  Of course it remains to be seen how accurate their tax reporting will be to both the resident and the IRS.  I hope everyone that cashed out has kept very good records of it all because you'll probably need it.

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Innula Zenovka wrote:

 

Can someone please explain what the point is of requiring people to email photo-id?   How do they know it's the sender's photo-id?

Like this (I guess)

:

In addition to the form itself, we are required to obtain a copy of your government-issued photo identification (ID). The information on the ID must be current (i.e. not expired) and must match the information you submitted on the form.

 

Please attach a copy of your identification to this Case. The copy must be clearly legible (full color, no smudges or blurs) and must be fully intact (no cut-off portions, no redacted information).

 

The following are acceptable forms of photo ID:

 

• Driver's license

• Military ID card

• Passport

• Any other form of government-issued photo ID

 

If your photo ID does not display your address, you must also provide us with a copy of a current utility or telephone bill. The name and address to which the bill is addressed must match the photo ID.

[End of quote]

 

The interesting point is "we are required to obtain a copy of your government-issued photo identification".  What are the requirements for this copy? If I take a photo of my ID card and send the photo, is it an acceptable copy?

As most ID cards do not have the address of the card holder Linden Lab has that extra verification wanting a copy of a current utility or telephone bill. Surely one could alter the information in both the ID card copy and the bill copy. But if Linden Lab was suspicious of false information they could check is the information correct or not.

 

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That makes sense, in that they're requiring two pieces of ID as a security measure, but I don't see what's so special about one piece having a photograph on it, in circumstances where it's never going to be possible to check if the photograph is that of the person submitting it.

I guess what I'm asking is, why insist that one piece of ID has a photograph?  I don't see how, in this situation, it's much more secure than two utility bills, or a utility bill and a bank statement, or whatever. 

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There is something in this I'm not clear on. What are 'Process Credit Requests'?

Who does this affect? Is it just those who are making money in SL, or can it affect those of us who are only spending money in SL? ie if I spend 'too much' can I expect to get this request for information?

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A "Process Credit Request" is commonly known as "cashing out".   That is, it's when you ask LL to transfer funds from your US$ account with LL to your PayPal account (or your bank account, but that's only possible in very unusual circumstances).

So only people who make money, or withdraw it, at least, are affected, and only then if they're withdrawing over a certain amount (I think it's US$10,000 a year or 200 withdrawals, from what was said earlier in the thread, but I may have misunderstood that -- if I have, the error is entirely mine).     So if you don't cash out, or even if you do cash out, but not very much, you shouldn't be asked to provide any of this documentation.

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Innula Zenovka wrote:

So if you don't cash out, or even if you do cash out, but not very much, you shouldn't be asked to provide any of this documentation.

Okay thank you for that.

So I can continue to splurge obscene amounts of money on things that don't exist to my heart's content, without having to ever worry about it (at least not for this reason anyway).

Thank you :)

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Coby Foden wrote:


Innula Zenovka wrote:

 

Can someone please explain what the point is of requiring people to email photo-id?   How do they know it's the sender's photo-id?

Like this (I guess)
:

In addition to the form itself, we are required to obtain a copy of your government-issued photo identification (ID). The information on the ID must be current (i.e. not expired) and must match the information you submitted on the form.

 

Please attach a copy of your identification to this Case. The copy must be clearly legible (full color, no smudges or blurs) and must be fully intact (no cut-off portions, no redacted information).

 

The following are acceptable forms of photo ID:

 

• Driver's license

• Military ID card

• Passport

• Any other form of government-issued photo ID

 

If your photo ID does not display your address, you must also provide us with a copy of a current utility or telephone bill. The name and address to which the bill is addressed must match the photo ID.

[End of quote]

 

The interesting point is "
we are required to obtain a copy of your government-issued photo identification
".  What are the requirements for this copy? If I take a photo of my ID card and send the photo, is it an acceptable copy?

As most ID cards do not have the address of the card holder
Linden Lab has that extra verification wanting a copy of a current utility or telephone bill. Surely one could alter the information in both the ID card copy and the bill copy. But if Linden Lab was suspicious of false information they could check is the information correct or not.

 

"As most ID cards do not have the address of the card holder."

This must vary by place but all the State issued ID cards, (The ID cards, not Drivers licences) that I have seen had an address on them. 

Specifically, in the state that I lived at the time, pre-patri-ass act opening bank accounts for my minor children all I needed to supply was Social Security card and show a copy of their birth certificate.  After patri-ass act I was changing banks and had to have a State issued Photo ID.  Crazy thing was the State ID card cost more than a Drivers licence did.

Also, State regs (and my understanding is this is true in all States) forbid having two State Issued cards....when they got their Drivers licences they had to surrender the ID Card to the State.

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