Kahre Tax Trial - Pay no Taxes if Paid in Gold
An interesting trial recently came to a conclusion with over 100 defendants fighting off an IRS instituted litigation regarding their unreported income (in the form of gold and silved coins). Surprisingly, the defendants were all let off with not guilty verdicts, a result which may affect gold investors.
The ruling indicates that gold coins can only be taxed at their face value rather than their market value. According to Rense.com:
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.”
Those who’d prefer to invest in their home rather than in gold can do so with a Utah home equity loan.
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