Second Life may be a virtual reality world, but there's nothing virtual about the money being made off of the web community. In fact, according to an article on CNNMoney.com, one user claims she has become a millionaire off the site. In the last 24 hours alone, users have put about $1.6 million into the Second Life world.

In this 3-D virtual world, users create their own Second Life persona and have the chance to buy and sell goods using Linden dollars, the currency of the website. The money made in this virtual world can then be converted into real U.S. dollars.

Because of the success of websites like Second Life, tax authorities will be re-evaluating how online earnings are reported. For example, can a transaction that takes place in Linden dollars become taxable? Some critics argue that as long as virtual activity remains within the virtual economy, it shouldn't become taxable. But even if profit isn't made in real U.S. dollars, there's still an exchange of items worth an economic value, which is a taxable event.

What’s the IRS have to say about it? "Any time someone wins a tangible prize or award, the value is reportable as taxable income. An accumulation of 'points' would not result in tax consequences, but redeeming or selling them for money, goods, or services would," says an IRS spokesperson.

Analysts predict that taxes on virtual-only transactions may start appearing in the next three to four years.