Legal tender
08-27-2009 | 09:00 PM
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Libertarian Resistance
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From: 757 FO
Legal tender
I saw this on a libertarian website. I won't post the whole article as it gets a bit political. This excerpt, though, might be of interest to those who frequent the money talk forum:
How can legal tender be illegal? :: Liberty Maven
Robert Kahre is facing up to 296 years in prison. His crime? He hired workers on mutually-agreed terms, and paid them in gold and silver dollars rather than in Federal Reserve dollars.
First, some background . . .
* The face value of the U.S. Mint’s gold and silver coins are legal tender, meaning they must be accepted in payment of debt
* But a Gold Eagle coin that has “$50″ printed on it is legal tender only up to $50, while its gold content is worth about $1,000 in Federal Reserve notes
* No law or IRS regulation requires that receivers of Gold Eagles and other U.S. Mint coins must report the market value of the coins instead of the legal tender value
After extensively researching the issue, Kahre . . .
* hired workers as independent contractors, so he would not pay the payroll tax for their labor
* paid them in gold and silver coins, whose face value – that is, legal tender value – was so low that the workers legally didn’t have to report it as income to the IRS
For instance, if a worker was annually paid in gold coins with a legal tender face value of $2,000, the market value of the gold content in those coins could be $40,000, but only the legal tender face value of $2,000 would theoretically count as taxable income. That face value of $2,000 is low enough to be non-reportable to the IRS. But . . .
Even though the coins Kahre used were legal tender, the Justice Department alleged that Kahre’s system was a fraudulent, tax-evading scam.
How can legal tender be illegal? :: Liberty Maven
Robert Kahre is facing up to 296 years in prison. His crime? He hired workers on mutually-agreed terms, and paid them in gold and silver dollars rather than in Federal Reserve dollars.
First, some background . . .
* The face value of the U.S. Mint’s gold and silver coins are legal tender, meaning they must be accepted in payment of debt
* But a Gold Eagle coin that has “$50″ printed on it is legal tender only up to $50, while its gold content is worth about $1,000 in Federal Reserve notes
* No law or IRS regulation requires that receivers of Gold Eagles and other U.S. Mint coins must report the market value of the coins instead of the legal tender value
After extensively researching the issue, Kahre . . .
* hired workers as independent contractors, so he would not pay the payroll tax for their labor
* paid them in gold and silver coins, whose face value – that is, legal tender value – was so low that the workers legally didn’t have to report it as income to the IRS
For instance, if a worker was annually paid in gold coins with a legal tender face value of $2,000, the market value of the gold content in those coins could be $40,000, but only the legal tender face value of $2,000 would theoretically count as taxable income. That face value of $2,000 is low enough to be non-reportable to the IRS. But . . .
Even though the coins Kahre used were legal tender, the Justice Department alleged that Kahre’s system was a fraudulent, tax-evading scam.
09-14-2009 | 06:03 PM
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