Gold and silver

Derry Brownfield — Silver, Gold and the IRS

Robert Kahre owns a family business and instead of using paper money he paid his workers with gold and silver coins minted by the United States government. He paid them based on the “face value” of the coins. If he paid a worker a dollar an hour he paid with a silver dollar, which states on the coin that it is “one dollar” regardless of today’s value. His wages were so low that he didn’t have to file W-2 income tax forms or withhold taxes or pay workman’s comp. This upset the IRS, which charged him and his family with 161 federal tax crimes.

The case which was tried before a Las Vegas jury in a Federal Court, heard testimony for almost four months. Defendants believed they had no legal obligation to withhold, pay income taxes or report anything to the government because the “face value” of the gold and silver coins is so small as to fall beneath the reporting thresholds set by the Internal Revenue Code. The government argued that the payments in gold and silver US coins must be considered at their bullion, full-market value when considering the worth of the wages for purposes of the IRS code. The essence of the argument is that Congress is obligated by law to mint and circulate such coins as demand requires, and must establish the value of coins as they are used as legal tender, but a coin’s market value is a distinct, separate attribute of such coins and is of no legal consequence if the coins are used as legal tender. If a worker is paid with such coins, his taxable income can only be the face value indicated on the coin. “A coin dollar is worth no more for the purposes of tender in payment of an ordinary debt than a note dollar. The law has not made the note a standard of value anymore than coin. It is true that in the market, as an article of merchandise, one is of greater value than the other; but as money, as a medium of exchange, the law knows no difference between them.”

Follow the link for the surprise ending, and let me know if you’ve already heard about this via the mainstream media.

via disinter


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