Employer's gold, silver payroll standard may bring hard time

[art]

Granted, with modern reporting "standards" you never really have the pertinent details, but this seems kind of broken if reported accurately.

If you paid your taxes with a $50 gold coin, the IRS would decrement your account by $50. But pay your employees with it and it's worth its weight in gold...

http://www.lvrj.com/news/46074037.ht...ts?submitted=y

Check out the comments - some are great.

[FRED]

Re: Employer's gold, silver payroll standard may bring hard time

Granted, with modern reporting "standards" you never really have the pertinent details, but this seems kind of broken if reported accurately.

If you paid your taxes with a $50 gold coin, the IRS would decrement your account by $50. But pay your employees with it and it's worth its weight in gold...

http://www.lvrj.com/news/46074037.ht...ts?submitted=y

Check out the comments - some are great.

Instead of paying employees in Federal Reserve Notes (FRN) or digital equivalent, an employer, call him Bob's Construction, pays his employees in 1 oz. U.S. gold eagle coins, including his employee Craig. Craig use to work for another company making $50,000 per year after withholding taxes. Working for Bob, Craig is glad to accept a contract to earn one gold coin per week, with two weeks paid vacation, or 52 per year. The Federal Reserve Note exchange rate value of each coin varies from $900 to $1,000 over the course of the year, so Craig earns more or less $50,000 in Federal Reserve money. He's taking some risk, because the FRN exchange rate value of the coins may decline over the year contract period, but accepts that risk.

Each coin, minted by the U.S. Mint, has a legal tender face value of $50. The sum of the face value of the 52 coins paid by Bob to Craig in a year is $2,600.

Which amount should Bob report to the IRS, the constant legal tender face value of the coins or the Federal Reserve Note Exchange rate value of each coin at the time Craig was paid? The legal tender face value of the 52 coins is certainly easier to compute, and the tax withholding on $2,600 is 95% less than the withholding on $50,000, so Bob choses the former.

Naturally, the IRS takes Bob to court.

At the trial, Bob's attorney holds up a $50 face value one ounce coin and a $50 FRN and asks the judge, "Your honor. Can you tell me which is the real $50? They both say $50 but clearly one of them is not accurate. My client believes it's the paper one. If he's wrong, then he'll gladly pay back taxes on the difference between the metal and the paper $50, but in that case he'd also expect the U.S. Mint to correct its error and in the future mint one ounce gold coins with the correct value, $1,000 instead of $50. We hope the court can clear this up."

The result? Case dismissed. True story, or so we're told.

[cjppjc]

Re: Employer's gold, silver payroll standard may bring hard time

Instead of paying employees in Federal Reserve Notes (FRN) or digital equivalent, an employer, call him Bob's Construction, pays his employees in 1 oz. U.S. gold eagle coins, including his employee Craig. Craig use to work for another company making $50,000 per year after withholding taxes. Working for Bob, Craig is glad to accept a contract to earn one gold coin per week, with two weeks paid vacation, or 52 per year. The Federal Reserve Note exchange rate value of each coin varies from $900 to $1,000 over the course of the year, so Craig earns more or less $50,000 in Federal Reserve money. He's taking some risk, because the FRN exchange rate value of the coins may decline over the year contract period, but accepts that risk.

Each coin, minted by the U.S. Mint, has a legal tender face value of $50. The sum of the face value of the 52 coins paid by Bob to Craig in a year is $2,600.

Which amount should Bob report to the IRS, the constant legal tender face value of the coins or the Federal Reserve Note Exchange rate value of each coin at the time Craig was paid? The legal tender face value of the 52 coins is certainly easier to compute, and the tax withholding on $2,600 is 95% less than the withholding on $50,000, so Bob choses the former.

Naturally, the IRS takes Bob to court.

At the trial, Bob's attorney holds up a $50 face value one ounce coin and a $50 FRN and asks the judge, "Your honor. Can you tell me which is the real $50? They both say $50 but clearly one of them is not accurate. My client believes it's the paper one. If he's wrong, then he'll gladly pay back taxes on the difference between the metal and the paper $50, but in that case he'd also expect the U.S. Mint to correct its error and in the future mint one ounce gold coins with the correct value, $1,000 instead of $50. We hope the court can clear this up."

The result? Case dismissed. True story, or so we're told.

Not a chance. What if he was paid instead old comic books with a printed price of $.10?

[FRED]

Re: Employer's gold, silver payroll standard may bring hard time

Not a chance. What if he was paid instead old comic books with a printed price of $.10?

When did the U.S. Mint begin to print brand new old comic books as legal tender?

[metalman]

Re: Employer's gold, silver payroll standard may bring hard time

When did the U.S. Mint begin to print brand new old comic books as legal tender?

right... that's the fed's job.

[cjppjc]

Re: Employer's gold, silver payroll standard may bring hard time

When did the U.S. Mint begin to print brand new old comic books as legal tender?

Actually..... never mind.


You don't think in the example you used the income was $2,600? It is clearly closer to $50,000. All kinds of compensation are taxed on their value. Not the printed price.

In your world, I sell a first addition Hemingway (original cost $5.00) for 10 pieces of gold, face value $50.00 my capital gain is only 2,450? Where as if I take a check for $10,000 my taxable gain is $9995.00

In the real world most people are not paid in cash. So the visual arguement you use isn't relevant. What is the intent of the compensation.



Btw: When these people converted the coins for legal tender, did they pay a capital gains tax?

[Diarmuid]

Re: Employer's gold, silver payroll standard may bring hard time

Actually..... never mind.


You don't think in the example you used the income was $2,600? It is clearly closer to $50,000. All kinds of compensation are taxed on their value. Not the printed price.

In your world, I sell a first addition Hemingway (original cost $5.00) for 10 pieces of gold, face value $50.00 my capital gain is only 2,450? Where as if I take a check for $10,000 my taxable gain is $9995.00

In the real world most people are not paid in cash. So the visual arguement you use isn't relevant. What is the intent of the compensation.



Btw: When these people converted the coins for legal tender, did they pay a capital gains tax?

Genuinely correct me if I am wrong but is the whole point of the exercise to highlight the hypocrisy of FIAT money the FED prints 50 dollars on a paper note and etches 50 dollars on a gold coin, the market judges the gold coin with 50 dollars etched on it to be worth 19 (approx presently) peices of FED paper with denotation 50 on it.

Which leads me to the question 50 dollars of what? If you dont know what you are being asked for in a tax bill (asking for settlement in dollars) how can you settle it in good faith, you have to make an assumption, the situation has no clarity? I personally do not see this as a question of semantics.

Sorry if this an over simplified post and I missed something.

[cjppjc]

Re: Employer's gold, silver payroll standard may bring hard time

Genuinely correct me if I am wrong but is the whole point of the exercise to highlight the hypocrisy of FIAT money the FED prints 50 dollars on a paper note and etches 50 dollars on a gold coin, the market judges the gold coin with 50 dollars etched on it to be worth 19 (approx presently) peices of FED paper with denotation 50 on it.

Which leads me to the question 50 dollars of what? If you dont know what you are being asked for in a tax bill (asking for settlement in dollars) how can you settle it in good faith, you have to make an assumption, the situation has no clarity? I personally do not see this as a question of symantics.

Sorry if this an over simplified post and I missed something.

If by exercise you mean the discussion between Fred and myself, I'm with you. I have no love for the Federal Reserve. Less since I discovered this wonderful place. If by exercise you mean the people being charged with tax evasion, I'm not with you. They were trying in an interesting way to get around their tax liability. Now this thread will lose it's original arc and desend into a discussion about the correctness of taxes.

[metalman]

Re: Employer's gold, silver payroll standard may bring hard time

Genuinely correct me if I am wrong but is the whole point of the exercise to highlight the hypocrisy of FIAT money the FED prints 50 dollars on a paper note and etches 50 dollars on a gold coin, the market judges the gold coin with 50 dollars etched on it to be worth 19 (approx presently) peices of FED paper with denotation 50 on it.

Which leads me to the question 50 dollars of what? If you dont know what you are being asked for in a tax bill (asking for settlement in dollars) how can you settle it in good faith, you have to make an assumption, the situation has no clarity? I personally do not see this as a question of symantics.

Sorry if this an over simplified post and I missed something.

i think you got it...

both the coin and the bill are legal tender.

both say '$50'.

you can go to the package store and buy $50 worth of vodka with a 1 oz gold eagle. not too smart but as legal as buying it with 50 of those $1 shitty fake gold looking dollar coins the mint wants us to use... and get hoarded... god knows why.

by the same token... heh, heh.. you can pay your employees with the $50 face value gold coin. maybe craig is ok with $2600 a year...

if this deal breaks down it's there... if the contract specifies gold coins then it's bogus. but... i'd guess bob and craig are not dimwits... they left that part ambiguous, just like the fed and mint have done.

[Judas]

Re: Employer's gold, silver payroll standard may bring hard time

Which leads me to the question 50 dollars of what?

In a sense it is like being told to pay "50 inches" or "50 bushels".

[sn1p3r]

Re: Employer's gold, silver payroll standard may bring hard time

Check out Kahre Tax Trial...

http://indymedia.us/en/2007/10/27793.shtml

After almost four months of testimony and three and a half days of deliberation, the jury did not convict any of the defendants of any of the 161 crimes alleged. Although some defendants were acquitted of multiple counts, and several were acquitted completely, others may have to stand for a retrial if the Government brings charges a second time.

The Review Journal reported the jury foreman claimed DOJ prosecutors admitted they were "shocked" by the outcome.

[metalman]

Re: Employer's gold, silver payroll standard may bring hard time

Check out Kahre Tax Trial...

http://indymedia.us/en/2007/10/27793.shtml

sssssh! don't tell everyone. if ya got balls, this one works.

i do worry about the ways the gov't closes this loophole... a big tax on gold sales will do it. :eek:

[sn1p3r]

Re: Employer's gold, silver payroll standard may bring hard time

Well you do have to be willing to be raided...

http://www.youtube.com/watch?v=2VJ3son-ha8

but i'm not sure i could bring myself to selling gold :eek:

[*T*]

Re: Employer's gold, silver payroll standard may bring hard time

Sadly in the UK, gold sovereigns have no nominal value imputed upon them.

[Slimprofits]

Re: Employer's gold, silver payroll standard may bring hard time

Kahre and his people won the first time around, so the federal prosecutors went after him again.

This article is from August 2008

http://www.lvrj.com/news/26825989.html

Robert Kahre -- a Las Vegas businessman charged with federal tax crimes that could put him in prison for the rest of his life -- gets a new judge for his second go-round, thanks to a maneuver rarely successful for criminal defendants in federal court.

The defense recently won a writ of mandamus from the 9th U.S. Circuit Court of Appeals. Defense lawyers argued that Judge Robert Jones was stepping on Kahre's right to legal representation when the judge decided Kahre could not hire Lisa Rasmussen as an additional attorney for his next trial.

Prosecutors argued before the appeals court, unsuccessfully, that Rasmussen had a conflict of interest representing Kahre because in the earlier trial she had represented Joel Axberg, a co-defendant who was acquitted.

A year ago, prosecutors tried Kahre and eight other defendants on 161 counts of breaking tax laws but came away with zero convictions.

The next trial is not a retrial of those charges but a new trial on a "new" indictment -- the latest in a series of seven indictments -- that came out in November.

Kahre is one of five defendants in the next trial.

The court here has not yet assigned a new judge because the appeals court just granted the writ on Friday. Judges Kent Dawson, Lloyd George and James Mahan already have recused themselves from the case.

Also facing trial are Kahre's wife, Danille Cline; Kahre's sister, Lori Kahre, who worked in his office; Alex Loglia, who did paralegal work for him; and Thomas Browne, a real estate agent and loan officer who helped with several purchases of property.

The government thinks Kahre bought the properties in the name of relatives to hide his assets.

[..]

In the first trial, the court told the jury that taxpayers need to account for coin income by the fair-market value of the precious metal content.

The defense acknowledged that Kahre and others might be forced to pay taxes owed but contended their mistakes were not intentional, nor criminal.

The federal government is alleging Kahre undervalued gold and silver coins. But the government accepted such coins at face value -- issuing no change back -- when defendants have paid filing fees at federal court in Las Vegas using a mix of gold and silver coins plus paper dollars, according to several affidavits.

The U.S. attorney's office in Las Vegas wouldn't comment on the 9th Circuit's sending the Kahre case back to be heard by a new judge.

Judge Jones also declined to comment on the reassignment. But in court on March 10, Jones had invited defendants to request his removal from the case with their request for a writ of mandamus.