A man who lives near Atlanta, Georgia will spend four months in prison and pay nearly $350,000 after cheating on his taxes. Gregg Kaminsky says "there truly was some confusion" about whether earnings from the Second Life virtual world were taxable.

Prosecutors said he made a lot of moves that led to his unusually harsh sentence, including opening a secret Swiss bank account, not declaring its income, omitting the Swiss assets from financial-aid forms, and botching a confession. He failed to disclose more than $140,000...