IRS legally kicked in the gonads...

[Manedwolf]

Has anyone here ever bought/sold American Eagle gold bullion coins? Since they are issued by the mint and contain a precise amount of pure gold, it seems like it would be safe to buy some. I'm not looking to invest or anything like that. I just think it would be kind of neat to have. My only concern is if I wanted to get rid of one, how much would they skim off the top for profit? Hmmmm

AFAIK, Canadian Maple Leafs are actually a purer gold. There's also Kruggerands and Credit Suisse ingots.

[Brad Johnson]

Brad, I'm just mystified how liquid the market has to be, or how comparable a similar item would have to be, before it can be used by the IRS to determine tax liability.

The real estate example was not tied to the IRS, it was a simple representation of using similarity in product to determine a vlue for taxation (in this case property taxes on a local level).

For the baseball, the IRS assigned the ball an arbitrary value and intended to tax the holder on it even though no actual value had been established.

Back to the coin thing...

A lot of people seem to be confused about coinage and who produced it.  The United States Mint produces gold coins which ARE legal tender, and are marked in specific denominations - $5, $10, $50, etc. - even though the value of the metal content may be wildly different.  There are third-party coin producers which make commemorative coins that are not legal tender anywhere by any government.  Then, there are third-party coin producers that make coins which have been designated as legal tender for some country other than the United States. 

When you see ads for coins look for the tender designation.  Anything that is legal tender for the United States will specifically say so.  Coins that are not legal tender in any form often won't say anything about being legal tender, on the coin or in the ad.  Coins that have been desginated legal tender somewhere else will usually say something like "Legal Tender in the Bananastan Rebublic" or somesuch.

Brad

[charby]

http://www.usmint.gov/mint_programs/buffalo24k/

here you go.. 

[richyoung]

Brad, I'm just mystified how liquid the market has to be, or how comparable a similar item would have to be, before it can be used by the IRS to determine tax liability.

The real estate example was not tied to the IRS, it was a simple representation of using similarity in product to determine a vlue for taxation (in this case property taxes on a local level).

For the baseball, the IRS assigned the ball an arbitrary value and intended to tax the holder on it even though no actual value had been established.

Back to the coin thing...

A lot of people seem to be confused about coinage and who produced it.  The United States Mint produces gold coins which ARE legal tender, and are marked in specific denominations - $5, $10, $50, etc. - even though the value of the metal content may be wildly different.  There are third-party coin producers which make commemorative coins that are not legal tender anywhere by any government.  Then, there are third-party coin producers that make coins which have been designated as legal tender for some country other than the United States. 

When you see ads for coins look for the tender designation.  Anything that is legal tender for the United States will specifically say so.  Coins that are not legal tender in any form often won't say anything about being legal tender, on the coin or in the ad.  Coins that have been desginated legal tender somewhere else will usually say something like "Legal Tender in the Bananastan Rebublic" or somesuch.

Brad

Must respectfully point out that per the Constitution, you are wrong.  Think about it - the Constitution specifically mentions "dollars" long before any "United States" currency could have been coined, (and there is a reason I use the term, "coined".)  By the Constitution, (which can only be altered by ammendmant), only Congress can  ".. coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;(Article 1, Section ".  This power is further explained in Section 10. "No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;..."

Just so we are clear - CONGRESS is to "coin" money, AND only "gold and silver coin".  Further, CONRESS is to set the ratio of gold to silver, AND assign the value of foriegn coinage - thus making foreign money "legal tender".  But still there is the question  - what "dolar" is the Constituion refereing to in Ammendmant 7?

"Amendment 7 - Trial by Jury in Civil Cases. Ratified 12/15/1791.

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law."

By its use in the ammendment, we know the "dollar" had a common accepted meaning well before the 7TH was passed - well before any signifigant American coinage could have occured.

So a "dollar" is what the term meant at the time the &th was drafted - and that meaning was universally understood to be an approximately 1 ounce coin of 90% or purer silver.  While the word "dollar" has German origins, the most common "dollar" in use in the US at the time was the spanish "real".  In fact, some reals were marked like a round pizza, so that "change" could be made by cutting it up into halves, quarters, and eights - with either a sharp knife or a hatchet.  This practice gave us the "half dollar", quarter, "2 bits, 4 bits, 6 bits, a dollar", and the term 'piece of eight".  Also the term, "to break a dollar".

[Brad Johnson]

Three words ... Don't Do Drugs.  Or consider starting.  Whatever works.

Brad

[tyme]

Richyoung, I don't understand what you're arguing relative to what Brad wrote.

Meanwhile, Article 1 section 8 seems to contain a paradox:
 "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"

If only Congress can coin money, and assuming "money" means something that is legal tender (you can use it to pay a preexisting debt to someone else, and they have to accept it), how can Congress set a value on foreign currency?  Since they didn't coin it, it can't be legal tender, can it?

[richyoung]

Richyoung, I don't understand what you're arguing relative to what Brad wrote.

Meanwhile, Article 1 section 8 seems to contain a paradox:
 "To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;"

If only Congress can coin money, and assuming "money" means something that is legal tender (you can use it to pay a preexisting debt to someone else, and they have to accept it), how can Congress set a value on foreign currency?  Since they didn't coin it, it can't be legal tender, can it?

If its gold or silver, yes it can.  What do you think the colonies used for money before signifigant amounts of US coinage occured?  Primarily Spanish and British coins.It was the sole power of Congress to say that 1 Spanish Real = 1 U.S. dollar = 0.6 Pond Sterling.    (or whatever)  It is also up to congress to set the reletive values of Gold and silver.


Now, here is what I'm arguing reletive to what Brad wrote:

They taught ME in school that the Constitution could only be changed by the ammendment process, or a Constitutional Convention.  To my knowledge, there has never been a Constitutional Convention since ratification.  That leaves the Ammendment process as the only other way to alter the "Supremem Law of the Land".  Again, to my knowledge, there has never been a Constitutional ammendment that removed Congress power to coin money OR to make anything other than gold or silver coin legal "money".  If that be the case, (and I submit it is....) then the "denomination" coins issued by Congress are in fact the ONLY "legal money". available.  Federal Reserve notes don;t come from any branch of the Government - it is a privatte company.  It's "notes" are in fact DEBT INSTRUMENTS = not "money".  Essentially, they are checks.  Of course, it says on them "this note is legal tender for all debts public and private" - but I can put a Cadillac emblem on a Hyndai - its still a Hyndai, despite the emblem.  Money has to have intrinsic value.  FRNs  don't.  A stamp has more intrinsic value....

[gunsmith]

I didn't read the whole thread because it is one of those threads
that are interesting if you more of a right wing loon then I am.
& thats pretty far out there.
I just want to say (for the record) that the IRS might monitor
the internet and I think that they're all swell
people and their children are really cute.

[Creeping Incrementalism]

Interesting side note:  Could one use this ruling as a way to play games with investments?  Suppose I spent $806 to purchase a 1-ounce gold coin with a face value of $50; could I then use the face value of the coin to justify that as a $756 loss on investment, and use that loss to offset gains elsewhere?

-BP

I could buy a handful and have my tax billed cleared via losses..  Sweet I tell ya.  There needs to be Family Guy episode written about that.

-C

You two are joking around, but I think you still missed the point in the article where it says they still have to pay taxes on the fair market value of the gold they received.  The trial was over whether they would have to, in addition, go to jail over the scheme.

If that be the case, (and I submit it is....) then the "denomination" coins issued by Congress are in fact the ONLY "legal money". available.

No, because Congress designated some of its minting power to the Federal Reserve.  And I don't want to be anal or sound condescending on your spelling, but if you are going to go on about the Constitution, learn how to spell "amendment"--there is only one "m" in "amend".

----------------------------------

I think the guy who started this scheme is a colossal dips-t.  Anyone with a little knowledge of how the IRS works-- as the "experts" he consulted should have had--would have known they would smack the hammer down on this guy and his employees eventually.  They are lucky most of them didn't receive a criminal sentence, and they still may yet receive one.  Furthermore, they went through the expense and emotional trauma of a trial, and still have to pay the back taxes they owe, plus interest.

Then there's also the fact that someone else brought up in this thread that by the business owner's own logic, he was violating the federal minimum wage law.  And still there is the "paying your fair share" part of this.  Surely the employees were selling the coins at fair market value, not face value.  So that means all of us that follow the rules end up taking up their slack.

All this because Ron Paul wanted to call the coins "legal tender" and nostalgically put artificially low dollar values on them.

[richyoung]

No, because Congress designated some of its minting power to the Federal Reserve.  And I don't want to be anal or sound condescending on your spelling, but if you are going to go on about the Constitution, learn how to spell "amendment"--there is only one "m" in "amend".

Good point on the spelling - not my strong suit.  You are, however, wrong oin the rest.  Congress doesn't have the authority to "designate" its minting power to a non-government entity.  That would require a constitutional ... amendment. Plus no "minting" is occuring - only paper printing and slug manufactury.

[Len Budney]

Congress doesn't have the authority to "designate" its minting power to a non-government entity.  That would require a constitutional ... amendment.

Exactly. Indeed, Congress has no power in the Constitution to delegate any of its authority, which is why all regulatory agencies are unconstitutional. They're a force multiplier for statists, though, because one law (empowering the agency) spawns thousands of laws (euphemistically called "regulations").

--Len.

[richyoung]

Congress doesn't have the authority to "designate" its minting power to a non-government entity.  That would require a constitutional ... amendment.

Exactly. Indeed, Congress has no power in the Constitution to delegate any of its authority, which is why all regulatory agencies are unconstitutional. They're a force multiplier for statists, though, because one law (empowering the agency) spawns thousands of laws (euphemistically called "regulations").

--Len.

...what you said, plus 1, with deluxe carrying case....

[Creeping Incrementalism]

No, because Congress designated some of its minting power to the Federal Reserve.

Congress doesn't have the authority to "designate" its minting power to a non-government entity.  That would require a constitutional ... amendment. Plus no "minting" is occuring - only paper printing and slug manufactury.

The Fed is effectively a part of the gov't for the purposes of monetary policy, since the gov't appoints the people who make the decisions.

I'd like you to show me that those who wrote the constitution meant only coins--that they specifically excluded paper currency, since the gov't has issued them since the Civil War, I believe.  I don't know for certain that you are wrong, but I'd be very surprised if you could show me something to prove that you are right.

[Len Budney]

Congress doesn't have the authority to "designate" its minting power to a non-government entity.

The Fed is effectively a part of the gov't for the purposes of monetary policy, since the gov't appoints the people who make the decisions.

No. That's wrong on every level, but the most important one is that Congress has the power to issue currency. They can't delegate that power. So for your argument to fly, you'd have to be claiming that the Fed is effectively part of Congress, which is clearly absurd. Congressmen are apportioned based on population, and Congress can't appoint extra congressmen.

--Len.

[Brad Johnson]

They can't delegate that power.

Actually, they can.

Brad

[Len Budney]

They can't delegate that power.

Actually, they can.

What is this, a playground? Can't! Can!

The Constitution gives them the authority, and doesn't give them the power to delegate that authority. QED

[roo_ster]

Len:

So, unless some member of Congress personally hammers out a coin with their own lawyerly hands, the currency is worthless?

[Brad Johnson]

Sigh... 

Took me all of about, oh, ten seconds to find these.


U.S. v. Rickman

U.S. v. Rickman, 638 F.2d 182, C.A.Kan. 1980:

Federal Reserve Notes in which the defendant, charged with failure to file federal income tax returns, was paid were lawful money within the meaning of the United States Constitution. 26 USCA ?7203; USCA Const. Art. 1, ?8, cl. 5. U.S. v. Wangrund, 533 F.2d 495; C.A.Cal. 1976

The statute establishing Federal Reserve Notes as legal tender for all debts, public and private, including taxes, is within the constitutional authority of Congress; thus the defendant could not overturn his conviction on two counts of wilful failure to make an income tax return on the theory that he did not receive money since checks he received as compensation for his services could be cashed only for Federal Reserve Notes which were not redeemable in specie. 26 USCA (IRC 1954) ??61, 7203; USCA Const. art. 1, ?8; Coinage Act of 1965, ?102; 31 USCA ?392.

Nixon v. Individual Head of St. Joseph Mortgage Company

Nixon v. Individual Head of St. Joseph Mortgage Company, 615 F.Supp. 890, affirmed 787 F.2d 596. D.C.Ind. 1985.

Federal Reserve notes are legal tender.

Ginter v. Southern

Ginter v. Southern, 611 F.2d 1226, certiorari denied 100 S.Ct 2946, 446 US 967, 64 L.E.d.2d 827. C.A.Ark. 1979.

Tax protestor's claims concerning the constitutionality of the Federal Reserve System, Internal Revenue Code and establishment of tax court were so frivolous as not to require discussion and detail. USCA Const. Amends. 5, 13; 28 USCA ?1346(a)(1); 26 USCA (IRC 1954) ?6532(a), 7422(a).

U.S. v. Schmitz

U.S. v. Schmitz, 542 F.2d 782 certiorari denied 97 S.Ct. 1134, 429 US 1105, 51 L.Ed.2d 556. C.A.Cal. 1976.

Federal Reserve Notes constitute legal tender and are taxable dollars. USCA Const. Art. 1, ?10.

Milam v. U.S.

Milam v. U.S., 524 F.2d 629. C.A.Cal. 1974.

The statute which delegates to the Federal Reserve System the power to issue circulating notes for money borrowed and the power to define the quality and force of those notes as currency is valid ... Although golden eagles, double eagles, and silver dollars were lovely to look at and delightful to hold, the holder of a $50 Federal Reserve Bank Note, although entitled to redeem his note, was not entitled to do so in precious metal. Federal Reserve Act, ?16, 12 USCA ?411; Coinage Act of 1965, ?102, 31 USCA ?392

The debate over whether paper money is "real" or not is a useless waste of time.  Okay, so you take replace a paper $1 bill with a coin stamped with $1.  But what have you really accomplished?  Not a friggin thing (that is, unless you list "Wasting A Bunch of Time On A Non-Issue" on your resume).  You have achieved literal, though judicially superceded, compliance with the constitution at the expense of a convenient and popular form of money.  Yippee.

Brad

[Len Budney]

Len:

So, unless some member of Congress personally hammers out a coin with their own lawyerly hands, the currency is worthless?

Of course not; that's not at issue. They can't delegate the legislative power to, e.g., set the federal discount rate or to decide how much money to print. They can hire someone to do the actual printing, but not the decision-making which is specifically authorized to Congress and nobody else.

Supreme-court rulings are irrelevant, BTW. They would also consider the EPA or other regulatory bodies constitutional. They're full of it.

--Len.

[MechAg94]

They are not delegating "legislative power".  They are delegating narrow regulatory authority within the restrictions defined by a law.  They are not restricted from delegating. 

[MechAg94]

Supreme-court rulings are irrelevant, BTW.

Yeah, tell us another one. 

[Len Budney]

They are not delegating "legislative power".  They are delegating narrow regulatory authority...

So they can make "regulations," but not "laws." What a relief! After all, a "law" is a decree which will be enforced by the government using its police powers, and could include fines or prison for violators. But these aren't "laws," so there's nothing to worry about. Whew! 

--Len.

[Len Budney]

Supreme-court rulings are irrelevant, BTW.

Yeah, tell us another one. 

Yawn. Lets talk Roe v. Wade or Dred Scott or Kelo v New London. And when they get around to denying that the 2nd Amendment protects an individual right, as sooner or later they will, we can toss back a couple brews before we admit that we were wrong all along, and go turn in our guns.

--Len.

[K Frame]

"The Constitution gives them the authority, and doesn't give them the power to delegate that authority."

You know, reading through the powers that the Constitution grants to Congress, one finds this little tidbit...

"To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

To make all Laws which shall be necessary and proper for carrying into execution the foregoing powers...

Interesting.

One looks that phrase, taken straight from the Constitution, and then compares it to what Congress did when it passed the Federal Reserve Act in 1913...

Seems to be a perfectly Constitutional exercise of a power granted to Congress by the Constitution.

[Len Budney]

You know, reading through the powers that the Constitution grants to Congress, one finds this little tidbit...

"To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof."

Not so little. That, along with the "general welfare" clause, are the two biggest loopholes through which the federal government wriggles out of all restraint. Hamilton's invocation of that clause to (wait for it!) charter a federal bank, proves that Hamilton intended just such an expansion of powers, despite his hypocritical arguments to the contrary in the Federalist Papers.

I'm afraid I go with Jefferson on this one. Big surprise there.

--Len.