Courtesy of RS.

 
IRS Suffers Defeat: Wages Paid in Gold   
NEW 10/1/2007 6:49:35 AM
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.

Hi List,

As a genuine ‘Honest Money’ aficionado, with a dream of reviving the 17th and 18th century genus of the Coffee House culture, I have loosely evaluated what ramifications may likely arise regarding interactions with regulatory and taxing entities, by setting prices of a prospective café’s fare, services and goods exclusively in silver exchange.

The deeper implications of this adjudication are both encouraging for prospects on that account, and for the enhanced feasibility of greater socio-commercial (if I may express the function so) re-emergence of the general practice of hard money dealings.

If the court’s holding prevails across other jurisdictions, this is undoubtedly a momentous revelation of nurture to our honorable movement! The recapture of our precious Liberty and Freedom is thus put in clearer focus!

To Attorney Hansen, I offer a most grand and patriotic … Huzzah!

In Covet’d Liberty, I Truly Remain

Pat’k Neil Fields
Philadelphia city & county
The commonwealth of Pennsylvania

Hi Malcolm,

I had misread what Ron Paul wants in a previous post about getting the government involved (as I thought this was his position).  Upon further review, here is what he says should happen in establishing a system of Honest Money.  Paul was on the original Gold Commission.  I see no individual who could get the ball rolling (or who has the clout to) other than Ron Paul;

"What we must first do is get the coinage into circulation, and then build the political base to lock the government's fiscal folly with golden handcuffs.  People have always understood the tangible value of gold coins in circulation.  They don't need to agree or even understand the fine points of monetary theory to own gold coins, trade gold coins, or use gold coins to satisfy part of their marginal utility demand for cash balances.

Most people understand very little about economics or monetary theory.  When they see supposed experts in disagreement, the status quo wins by default, because nobody with the power to change it has the courage of conviction.  The majority of voters see the debate among experts and hesitate to support any leaders with comprehensive reform schemes.  This is why all efforts to rebuild a gold monetary system have met with frustration and stalemate in the past.

The demonstrated popularity in the United States of Krugerrand coins, and all the imitators of the Krugerrand (Maple Leaf, Panda, Onza and the U.S. Gold medallions) have shown us that it is possible to adopt another tactic, that of getting gold coins into circulation prior to seeing a new par value for the dollar.  Indeed, the only affirmative recommendation of the Gold Commission was to create a new U.S. gold coinage in unites of weight.

I would love to see a purely private, free market monetary system with any honest manufacturer able to produce coins, as Americans saw in California from 1849 to 1864.  There must certainly be no restrictions on the private production of coins, but I believe that getting the U.S. Mint further into the act, producing a gold coinage with some of the mystique of the government, will be useful in the further political stages of monetary reform.  Honest money, after all, is a political objective; it is fitting that people should demand honessty from their government, as well as an economic policy that permits individuals to compete honestly.  An official coinage that reflects honest bullion weights is a powerful symbol of the gold standard we support."