And it should be required to file a tax return only when those kinds of situations actually apply to you. The majority of the population doesn't actually have those concerns.

Are Genshin Impact microtransactions a tax write off?

There are carefully crafted rules to make things like in-game winnings and frequent flyer mile accruals non-taxable. I think the key rule is that you can't convert the in-game currency to real cash; this is why airlines close your frequent flyer account if you sell miles or offer to give other people your awards for money. They probably don't care, but the IRS does.

How this all changed with cryptocurrency, I don't know.

I think taxes are all about what's written down and what logically makes sense. If you pay someone $1000 to do a job, they have to pay taxes on that. If you invite your friends over and spend $1000 on food that they eat, they don't have to pay taxes on that. I don't know why.

Yes, a non-w2 wage earner has income that is not tracked by a w2 ...

The general issue with gambling wins is not that the IRS doesn't know (casinos report winnings) its that they don't have to report losses.

Another asymmetry: Winnings are always included while losses are itemized. Which means if you take the standard deduction you cannot write off the loses, but still have to include the gains.

What? Casinos don't report all winnings. Anyone can get chips for cash, and cash for chips.

Indeed, there's a size limit on reportable winnings that trigger the necessity of a W-2G. There's also potentially different requirements that trigger tax withholding by the payer.

It's generally $600 for winnings, and $5000 for withholding.

https://www.irs.gov/pub/irs-news/at-01-17.pdf

https://www.irs.gov/pub/irs-tege/gaming_withholding_reportin...

Cool. How does the current system solve this?

Why can’t the IRS just tell me what they think I own by April 15th, and then i can add things to it.

My taxes are really simple. I still don’t understand why I have to spend at least 40 minutes every year giving the IRS the information that they already have.