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How to Sell Gold Without Reporting It

Discussion in 'PM's - Coins - Numis - Base Metals' started by Goldhedge, Dec 20, 2012.



  1. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    They're selling some if you click on the link. Just thought the info was interesting.


    Tom Cloud: How to Sell Gold Without Reporting It

    by John Rubino on December 20, 2012

    In this week’s talk with National Numismatic Associates’ Tom Cloud, he answers two big questions that confront precious metals buyers: Why are sales of some coins and bars reportable to the IRS and others not? And is it possible to buy and sell precious metals confidentially?

    Dollar Collapse: Hi Tom. So, what are you hearing from clients this week?

    Tom Cloud: A lot of people are asking for British sovereigns, Swiss francs, and Austrian coronas, coins that don’t require filing 1099s when you sell them.

    DC: The fact that some coins and bars have to be reported and some don’t seems both arbitrary and important in deciding what to buy. Could you give an overview of US precious metals reporting rules and how your clients tend to approach the issue?

    TC: Sure. When they created the Patriot Act [in 2001], the excuse was that the terrorists who blew up the Twin Towers had used pure gold and silver to finance their flight training. Whether that’s true or not, I don’t know. But the US imposed reporting requirements on sellers of 24-carat gold coins. If you sell more than 24 ounces in one year you’re required to file a Form 1099 with the IRS.

    The 24-coin threshold applies to individuals, not families. If a husband and wife buy gold under their own names, they can each sell up to 24 ounces without having to report it. But if they bought the gold jointly, for instance with a check with both their names on it, they can only sell a total of 24 ounces in any given year. If a client sells 12 in March and 13 in December, all 25 ounces have to be reported to the government. If a client comes to me and sells 12 ounces and goes to another dealer and sells 13 ounces, they have triggered the reporting requirement, and it’s their responsibility to report it. Even if they think they’re getting away with something they may not be. I’m required to keep records, so if the government calls I have to reveal them. There are several cases where coin sellers have had to pay huge penalties for trying to avoid reporting by using more than one dealer.

    Most 22-carat gold coins are exempt from Patriot Act reporting requirements, the only exception being the krugerrand.

    DC: You mentioned European coins. Why are they exempt?

    TC: There are some European coins that aren’t being made any more. Technically, people consider them to be rare, semi-numismatic coins. But some of them are actually cheaper than the major bullion coins. For example, the Austrian corona was only made from 1908 to 1915. It has .9802 oz of gold in it. If you’re out there today buying a gold eagle, you’re going to pay 5% – 6.5% over spot. But I buy Austrian coronas from a central bank as bullion coins, and can sell them at 2.75% over spot.

    Another good example is the French 20 franc coin, which was made from 1856 to 1914. It contains 0.1867 ounce of gold, so it takes 5.35 of them to equal an ounce. Fractional coins usually have very large premiums. For example, a quarter-ounce gold eagle is somewhere between 10% and 12% over melt. We’ve got French 20 franc coins at 4.5% over spot and we’re selling hundreds of thousands of dollars worth of them because they’re completely confidential. So the best buy right now is the European coins because of their combination of low premiums and confidentiality. Every major wholesaler that I deal with puts a price out trying to buy these European coins every day. There’s big demand for them.

    DC: Let’s summarize with a list of which coins are and are not reportable.

    TC: The following one-ounce gold coins are reportable beyond the 24-ounce threshold: the maple leaf, philharmonic, kangaroo, krugerrand, Mexican onza, and buffalo. All one-ounce gold bars are also reportable above 24 ounces.

    The following 22-carat gold coins are not reportable: US gold eagle, Mexican 50 peso, Austrian 100 corona, British sovereign, French 20 franc, Swiss 20 franc.

    DC: Got it. What about silver?

    TC: Silver is very easy. There are only two things. One is a full bag of junk silver which contains 715 ounces and constitutes $1,000 face value. It is reportable in the calendar year that it’s sold. The other is silver bars and coins in any combination – one-ounce, ten-ounce, 100-ounce or 1000-ounce – once the total hits 1,000 ounces. So you can actually sell more ounces in silver bars than you can of junk silver and not have to report it.

    DC: Any risk of these rules being tightened?

    TC: They tried with the health care bill provision that any transaction over $600 required a 1099, but when everybody realized that whether you bought a high-def TV at Wal-Mart or a gold bar or a car, both the buyer and seller would have to send a 1099 to the government, they dropped that rule. I don’t see anything similar on the horizon.

    http://dollarcollapse.com/precious-metals/tom-cloud-how-to-sell-gold-without-reporting-it/
     
    gb1980, Sport, oldgaranddad and 9 others like this.
  2. 917601

    917601 Mother Lode Found Mother Lode

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    I was in the local coin shop this morning talking to the owner , he stated he reports only amounts of $10,000 or more, regardless of buying or selling. Just what are the rules, seems everyone interprets differently. IRS rules, Patriot Act rules, etc....
     
    Goldhedge likes this.
  3. bb28

    bb28 Silver Member Silver Miner

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    There's quite a bit of doublespeak here which has not been decided upon.

    If you do the research, precious metals carry a capital gains tax of 28%. The capital gains tax is supposedly due and payable once the PM is cashed out into US dollars. As far as I understand, the capital gains tax would still apply in most (if not all) cases, regardless of whether there was official reporting. Remember, if I have a lemonade stand and make $20 on a weekend, I am still supposed to report it as income.

    The IRS code treats trades at their dollar value. For example, if I am a contractor and I decide to trade some contracting work in exchange for a pick-up truck, I should attempt to value the cost of my work vs. the pickup truck and keep records for the transaction as if I had invoiced out my work in US dollars and was paid for it in US dollars. Then, I would report the pick-up truck's value as revenue minus my expenses to perform the work to calculate income.

    To add to the confusion, many PMs are legal US tender. I can take a junk silver dime, quarter, and half-dollar and use it for legal commerce. In this case, one must question how you can take capital gains on legal tender. I know that pre-1981 pennies and nickels have copper value that exceeds the face value of the coin. Should a lawful citizen report these as capital gains when they are cashed out? If you are bringing the case to that level, could all of us file our taxes with capital losses since the money we are paid in has lost some of it's value by the time we are ready to spend it.

    Those are just the legal issues. When you get to paperwork and enforcement, it's not hard to see why this is the power structure's biggest nightmare -- independent citizens with anonymous wealth that cannot be tracked, controlled, taxed or even reported on in smaller denominations with a dubious at best claim to tax profits on trading one form of legal tender for another.

    bb
     
    Last edited: Dec 21, 2012
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  4. bb28

    bb28 Silver Member Silver Miner

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    What he is referring to is a form 8300 which must be filed for any time that $10,000 or more in CASH is transferred from one party to another for a single transaction. This rule is not specific to metals and coin dealers.

    http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Form-8300-and-Reporting-Cash-Payments-of-Over-$10,000

    bb
     
  5. Rollie Free

    Rollie Free Gold Member Gold Chaser

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    I have a widget that my friend values. He wants to trade it for something he has that I could use. We agree to the trade. Why in the heck anyone else should be involved or think they need a cut of that transaction is beyond me.
    Taxing trade is nonsensical garbage. What govt service was used or infringed upon?
     
  6. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    Simple: If you cash in (use in commerce) that Franklin half for the .50 value then there is no capital gain....if you sell it for more than you bought it for then there is

    If you sell $1000 worth of copper pennies for more than the $1000 then there is a gain

    If you use money that says $5 on it and buy something for $5 then there is no loss....as my father always said "Five bucks will always get you five bucks worth of gas"

    It's really not rocket science.....and....it would be a bit anal to report every barter transaction on a tax form but feel free to report away....Do you REALLY think EVERY Ebay transaction is reported??? REALLY????
     
  7. Fiat Metaler

    Fiat Metaler Gold Member Gold Chaser

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    so we have managed to confuse three reporting schemes - IRS, the $10,000 cash limit, and the special patriot act rules for money equivalents and bullion.

    the patriot act has special rules for bullion. that is what this guy is referring to. most investors and bullion dealers know little about these. this is what the person being interviewed is referring to.
     
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  8. bb28

    bb28 Silver Member Silver Miner

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    It goes a bit further than that. If I have $1.00 of pre-1965 coins with .715 oz of silver content, the market would say that at ~$30/oz it is worth ~$21.45. If I use this $1.00 in a commerce transaction, who is to say what the item is worth that I bought or the value of my "$1.00". Plus, is it reasonable for me to track every single silver quarter I have to find out what the silver value was at the time I acquired it?

    If you sell $1000 face value of nickels that would be 20,000 nickels. Do you have a clue what the copper value of each individual nickel was when you acquired it? And, do you have paperwork to back up that claim? If you bought the nickels at $1000 face value while copper was at $0.04 per nickel, can you claim a loss?

    bb
     
  9. GOLDBRIX

    GOLDBRIX In God I Trust and most in GIM Gold Chaser

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    CASH MAKES NO ENEMIES, LET'S BE FRIENDS!

    Keep sales low and off the RADAR. Better to make multiple sales at various sites than take the quick & lazy way out with big money sales.
    Sell for cash at flea markets, gun shows, private sales, pawn shops and coin stores that pay in fiat.
    Checks leave a trail.
    At least make the trail hard to follow.

    At tracks and casinos the IRS is not intested in anything less than $600.00 wins. Ask Pete Rose.
     
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  10. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    If you PAID more than .25 for the quarter (and have some issues we won't get into here) then yes....if you got it in change then you "paid" .25 for it...this is not the same as a cost basis inheritance....it is your choice whether to spend it as a quarter or sell it for a tad over $5

    If you paid (or got them in change) $1000 for the nickels then you basis is $1000...it's irrelevant what they are made of..they cost $1000....sell them for $1000 and it's over...sell them for $$2000 you have a $1000 gain....again...not rocket science and molecular analysis of the coins is irrelevant. It's the beginning act (purchase) and ending act (sale) that count,,,what happens in between and even what they are made of does not enter into the equation....it's all about the Benjamins

    (can you tell it's a rainy, windy, crappy day in MA?) :wink_smile:
     
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  11. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    Casinos create a tax document after a $1200 single bet win....with ticket in/ticket out as long as you do not have a win over $1200 you will not be subject to a tax form at the casino , I have cashed out a ticket over $3000 a few times (multiple cumulative smaller wins) and have had no issues
     
  12. badhop55

    badhop55 Silver Member Silver Miner

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    Who's on 1st?
     
  13. Gcubed

    Gcubed Banned

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    It boils down to one fact. If you buy or obtain precious metals in any form and then later sell or trade for a profit, YOU OWE TAXES on the gain.
     
  14. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    Damn....where were you earlier. I tried that same thought but with WAY too many words and examples...it obviously confused the confusable..

    :beer1:
     
  15. Gcubed

    Gcubed Banned

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    I've said that in SO many threads like this that I'm SICK of it. :vollkommenauf:
     
  16. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    For a perfect example: see the post just above your last one....
     
  17. Gcubed

    Gcubed Banned

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    Hey, he got the math right. :cool:
     
  18. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    All I can say is "Wow!".....
     
  19. Fiat Metaler

    Fiat Metaler Gold Member Gold Chaser

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    and your transaction may be reported to FinCen even if you don't make a profit, if you paid in cash.
     
  20. GOLDBRIX

    GOLDBRIX In God I Trust and most in GIM Gold Chaser

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    I contest you have NOT made a PROFIT.
    You have simply MAINTAINED purchasing power from a government authorized and Federal Reserve deployed scheme to steal from ALL though over printing / depreciation of usd (small print intended) fiat.

    Gb
     
  21. Gcubed

    Gcubed Banned

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    Tell that to the judge. I'm just pointing out the rules that we must follow. I didn't make them.
     
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  22. minimus

    minimus Banned

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    For barter, the IRS requires both traders to assign a dollar value to the trade .............. make it ........ 1 dollar.

    If you trade (money) like an AGE for a used car declare the AGEs face value in trade .... make it ..... face value.

    The IRS has never challenged the face value of U.S. mint coins .......... think about that.

    Its when you convert your PMs back to FRNs is when you become liable for capital gains (participating in monetary inflation) and you get taxed and rightfully so.
     
    Last edited: Dec 23, 2012
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  23. bb28

    bb28 Silver Member Silver Miner

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    Actually, they did. Anyone else remember the story of a guy several years back who owned a business and decided to pay his emloyees in gold coins. They were making something like $5 per pay period. The IRS raided the place and prosecuted the owner (successfully, I think).

    http://heidilore.wordpress.com/2009...in-prison-for-paying-employees-in-gold-coins/

    bb
     
  24. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    SO using your faulty logic if I had bought gold in January of 2007 for $600 and sold that same gold 14 months later for $1000 I would not have made a profit ...because the value of the dollar had decreased (?) by a value equal to the 65% positive change in gold price and it was a wash?????

    ...and if I had instead bought that same gold for $1000 in March 2008 and sold it 7 months later for $700 I would not have realized a loss because the dollar had strengthened (?) by the same 30% decrease in value of the gold and it was a wash???

    Really???? I think I could handle "maintaining" with that extra $400 in my pocket from example one and I guess I shouldn't feel bad about having $300 less in example #2 because I was just "maintaining" again...

    Really???
     
  25. bb28

    bb28 Silver Member Silver Miner

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    That's really the rub. If you keep your money in FRNs and lose value, you cannot claim capital losses.

    If you trade for metals you need to claim capital gains just for preservation of wealth.

    First they tax you on the income, then they tax you just to keep it and then they tax the transaction.

    bb
     
  26. lumpOgold

    lumpOgold Silver Member Site Supporter Silver Miner

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    I am buying a little bauble for the missus from my local jeweler, it contains some gold and a couple of green stones. If I pay cash the jeweler will not charge sales tax (8.375%), do you think that sale will be reported?
    Likely it won't be reported at that tax rate. And I'm more than glad to pay in cash.
     
  27. minimus

    minimus Banned

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    It was a lot more complex than that.


    "Three of the four present defendants were among the nine people tried on similar charges two years ago, but no convictions resulted. In the 2007 trial, four others of the nine defendants, including Kahre's mother, were entirely acquitted. Two individuals were only partially acquitted, but dropped from the indictment that forms the basis for the trial before Ezra."

    "This time around, the only new defendant is Danille Cline, Kahre's girlfriend of 19 years, and the stay-at-home mother of his four children. The government claims she obstructed the Internal Revenue Service by allowing Kahre to place several homes in her name, thus attempting to conceal his assets."


    http://www.lvrj.com/news/46074037.html#blogcomments?submitted=y
     
  28. GOLDBRIX

    GOLDBRIX In God I Trust and most in GIM Gold Chaser

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    RULES and LAWS are meant for the obedient to follow and the rest to challenge. Why else have Courts, and in the US, The Jury System ?

    The People have been known to WIN in Court(s) and get legislators to change or amend laws at the state and federal levels.

    Civil Disobedence is allowed by our Constitution.

    Gb
     
  29. GOLDBRIX

    GOLDBRIX In God I Trust and most in GIM Gold Chaser

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    The 1040 forms I use has a section for LOSSES if you choose to report.

    DYODD,
    Gb
     
  30. GOLDBRIX

    GOLDBRIX In God I Trust and most in GIM Gold Chaser

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    The concealing was of real estate assets NOT for paying workers in US Gold Coinage. That's called "shotgunning" the prosecutor throws enough sh!t at the defendant something ends up sticking.
     
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  31. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    Ahhhhh..I get it now....you can have real losses but you can't have real gains....gains are paid in money that is worth less (65% in 14 months) but losses are real because money never is worth more

    ...and the fact that the metal just could have appreciated or depreciated purely because of demand or the lack of is totally erroneous...:hmmmm2:.

    (as was mentioned previously that same 1040 form also has a section for gains if you choose to report)

    Happy Holidays :beer1:
     
  32. andial

    andial Sir Midas Member

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    I only wish I had a taxable gain problem, right now sitting on a loss. (purchased the stuff in 2011).:mad:
     
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  33. TRYNEIN

    TRYNEIN Silver Member Silver Miner

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    September 30, 2007


    Media Blackout:
    161 Federal Tax Charges, 0 Convictions

    IRS Suffers Staggering Defeat
    Tax Questions Raised Regarding
    Gold and Silver Coins Used to Pay Wages

    Around noon on Monday, September 17th, a Las Vegas federal jury returned its verdict refusing to convict nine defendants of any of the 161 federal tax crimes they had been charged with. The charges included income tax evasion, willful failure to file and conspiracy to evade taxes.

    The four-month trial centered around the family businesses of Robert Kahre who paid numerous workers for their labor with circulating gold and silver U.S. coins, and did not report the wages. The payments took place over several years, allegedly totaling at least $114 million dollars.

    On September 20, 2007, three days after the federal trial's dramatic conclusion, the Las Vegas Review Journal, reportedly under a degree of public pressure, ran its first (and last) story about the outcome of the trial. To this day, with exception of the single article by the Review Journal, no major media entity has published a news story regarding the outcome of this important federal criminal tax case.

    The censorship of this important news story is, unfortunately, not unexpected given the continuing, worldwide onslaught against the U.S. "dollar" -- specifically the Federal Reserve variety, and the ever growing numbers of Federal Reserve Notes required to trade for an actual ounce of silver, gold, oil, or for that matter, anything.

    In short, this failed prosecution has coalesced and exposed truths our Government desperately needs to hide from the People: the truth about our money, the truth about our (privately-owned) central bank, and the truth about the fraudulent nature of the operation and enforcement of the federal income tax system.

    Click here to read the April, 2005 DOJ press release announcing the prosecution.
    Click here to read the 9/20 story by the Review Journal about the trial.

    According to defense attorney Joel Hansen, who represented co-defendant Alex Loglia, the primary "willfulness" defense was that the defendants believed they had no legal obligation to withhold, pay income taxes or report anything to the government because, in part, the nominal (i.e., 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 Defendants also argued that regardless of the valuation of the coins for internal revenue purposes, there is no law that requires average American workers to file or pay direct, un-apportioned taxes on the fruits of their labor.

    The Government argued that the payments in solid gold and silver U.S. coins must be considered at their bullion (i.e., intrinsic full-market) value when considering the worth of the wages for purposes of the internal revenue code.

    Attorney Hansen cited two Supreme Court cases bolstering Defendant's monetary argument at the heart of the defendants "willfulness" defense.

    The essence of the argument is that under the Constitution 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 the coins' market value, arising as valuable personal "property," is a distinct, separate attribute of such coins, and is of no legal consequence if the coins are used as legal tender.

    In other words, if a worker is paid with such coins, his taxable "income" (if any) can only be the face value indicated upon the coin money paid -- i.e., $1.00 for a circulating silver dollar or $50 for a circulating gold U.S. coin. Not surprisingly, the IRS has never issued any public guidance regarding this significant issue.

    The first case, Ling Su Fan v. U.S., 218 US 302 (1910) establishes the legal distinction of a coin bearing the "impress" of the sovereign:

    "These limitations are due to the fact that public law gives to such coinage a value which does not attach as a mere consequence of intrinsic value. Their quality as a legal tender is an attribute of law aside from their bullion value. They bear, therefore, the impress of sovereign power which fixes value and authorizes their use in exchange."
    The second case, Thompson v. Butler, 95 US 694 (1877), establishes that the law makes no legal distinction between the values of coin and paper money used as legal tender:

    "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 any more 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, that is to say, as a medium of exchange, the law knows no difference between them."
    Defense attorney Hansen confirmed that members of the jury were able to actually hold and inspect the gold and silver U.S. coins paid to the workers.

    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.

    In March 2007, the primary defendant, Bob Kahre, filed a federal civil rights lawsuit against the prosecutor and IRS agents who had conducted what he alleges to be an unlawful search and seizure raid. In 2005, the Ninth Circuit Court of Appeals refused to overturn a previous District Court ruling holding that the federal prosecutor is not entitled to absolute immunity for the unlawful raid. Read more.

    Click here to execute a Google News search to attempt to locate recent news stories about the Kahre tax trial.

    The media suppression of this story is similar to the widespread mainstream media suppression of the July 11, 2007 acquittal of Louisiana attorney Tommy Cryer who was also charged with multiple federal income tax crimes and relied upon numerous Supreme Court precedents and U.S. tax laws to establish his "willfulness" defense. Click here for a previous WTP update containing a link to Cryer's 100-page Motion to Dismiss which details his legal arguments.

    Click here to execute a Google News archive search to attempt to locate news stories about Tommy Cryer's tax trial.



    PLEASE NOTE: Following recent statements by the DOJ, most of the content of the WTP websites (including our on-line store) has been fully restored for public access. The "6700" case is currently being appealed to the Second Circuit Court of Appeals.

    http://www.wethepeoplefoundation.org/UPDATE/Update2007-09-30.htm
     
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  34. Po'boy

    Po'boy Gold Member Site Supporter Gold Chaser

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    If one pays 30FRN for a 1dollarUS minted coin didn't they see a loss?
     
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  35. Unca Walt

    Unca Walt Midas Member Midas Member

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    Not at all. Where the heck ya been, bro?

    You walk down the street and see a yard sale. You buy quarter that is clad, but it is a Nebraska quarter, and both you and the seller love Nebraska clad quarters. So you pay $10 for it.

    Did you see a loss?

    But, but... you paid MORE FRN's for that US-minted quarter than face value, right?

    That ain't a loss, is it.

    See it now?

    Now what happens when Po'Boy goes back to New-Braska, where those US-minted quarters are snapped up for $20 each by the locals...
     
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  36. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    Obviously you do NOT collect coins....EVERY purchase would be a loss...and I guess we won't talk about that '09S vdb that should have sold for 0.01...nothing should EVER cost more because ALL increases are due to the FRN's we use..not the actual demand for the product which is totally not a factor..

    Amazing!...and kinda scary
     
  37. Po'boy

    Po'boy Gold Member Site Supporter Gold Chaser

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    I buy an asset say a house for 50k in FRN then sell for 15kSae they are both legal tender as per the US code, on paper there was a loss.

    If the reverse I had a taxable gain.
     
  38. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    Oops...forgot this link as a comment to the huge post above:

    (I won't take up a whole page)

    Same case....guilty verdict. I posted the article from the Las Vegas Review Journal rather than from a biased article

    http://www.lvrj.com/news/53287717.html
     
  39. Foxwoods Man

    Foxwoods Man Silver Member Silver Miner

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    Error in post ...removed
     
  40. Po'boy

    Po'boy Gold Member Site Supporter Gold Chaser

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    Qoute from article.


    Busted for tax evasion not avoidance.

    I guess he never heard of private business and non disclosure agreements.
     

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