Thread: TAX case - have you heard of this one?

Originally Posted by James48843

I never heard about this particular case before today .

But I get it.

Wow.

Why didn't I think of this ? ? ?

This guy gets a huge atta-boy from me.

Here is what he did:

He has a family business.

Instead of paying his employees in paychecks- he hands them a U.S. Government issued gold coin.

The United States Mint Coins and Medals Program

2012-Buffalo-Bullion-obv_180x180.JPG

Now, while it is true that an ounce of gold might be hovering around $1700 right now, the FACE VALUE of the U.S. Gold Coin is stamped $50.

So the person RECEIVING the coin claims, on his TAXES, that he received $50 in income.

And, of course, after receving 50 of those coins over the course of the year, the person has gotten an INCOME OF $2500 ($50 X 50= $2,500) in FACE VALUE over the course of the year, and now looks at the IRS tables, and says he doesn't have to file an income tax return, because he only made $ 2,500 over the entire year.

(50 X $1700 CONTENT value = $85,000 WORTH of income, vs. $50 X $50 FACE value, $2,500 FACE VALUE.)


IRS takes him to court.

His lawyer puts three different accountants on the witness stand, and asks them "Which value do you use to calculate the taxes owed- the U.S. MINT applied FACE value, or the unsold net-content GOLD ounces VALUE?" All three accountants say "I don't know, I'll have to go do some research and get back to you." (P.S.- there is no law which tells you which to use).

So laywer says..."See Jury- even accountant tax experts don't know- so how can you expect a simple citizen from doing anything other than the common sense thing- if the U.S. Mint put on it that it was worth $50, who am I to claim anything OTHER than that?



And the jury aquits the guy of IRS tax evasion charges.


Interesting.
http://www.rapidtrends.com/robert-ka...e-irs-and-doj/

Really cool, the boss has them by the, ahh the you know whats.

How does the IRS handle it when someone sells Krugerrands or other gold coins bought for investment purposes? The value of them change daily, but are they minted with a value stamped on on them?

I have 15 U.S. Mint gold coins I bought in 1980 at $800 each - the IRS will never know when I sell them. Actually I never plan to sell them. The IRS only knows what a 1099 tells them otherwise they are blind as bats.

I would think, technically, that selling such a coin at a price higher than what one paid for it- would be a capital gain, subject to cap gains tax. But not social security, or federal income tax. Or state income tax.


Interesting idea, isn't it?

Originally Posted by James48843

I would think, technically, that selling such a coin at a price higher than what one paid for it- would be a capital gain, subject to cap gains tax. But not social security, or federal income tax. Or state income tax.


Interesting idea, isn't it?

don't be giving the tax goons any ideas. there's two sides to every coin.

all the gov has to do is give every single fed employee an across the board raise to $26 million dollars per year, then mint up $1 million dollar platinum coins and dole one out to each of us every two weeks. the irs then levies a bi-weekly charge to every known bank/brokerage/line of credit account of record you have to collect its taxes/fica/etc in regular old cash.

we'd be out of debt as a nation in no time with those kind of contributions rolling in. plus it would make our society much more equal and utopian-like because we'd all be in the same broke boat.

problem solved.

What about this one? $_nnuut_1..jpg

Originally Posted by nnuut

What about this one? $_nnuut_1..jpg

ha ha! that's so old school. i didn't know there were any of those left. i switched computers then ditched the new one for a phone and about 3 digital iterations later there is no record. even tsptalk lounge history has no record of cards from that era, but you got a rare chip there. how 'bout cashing it in and payin' some o my bills? those were good times.

Originally Posted by Birchtree

I have 15 U.S. Mint gold coins.

sorry birch, i tried to resist, i really really did, for what seems like forever to me, but i had to take the bait. it sometimes seems like you're one ounce short of a pound. go bulls.

Originally Posted by burrocrat

ha ha! that's so old school. i didn't know there were any of those left. i switched computers then ditched the new one for a phone and about 3 digital iterations later there is no record. even tsptalk lounge history has no record of cards from that era, but you got a rare chip there. how 'bout cashing it in and payin' some o my bills? those were good times.

Sorry to say that's the only one I have left, I spent the rest! devilavatar.gif

Originally Posted by James48843

And the jury aquits the guy of IRS tax evasion charges.

Except that he was ultimately convicted two years later and sentenced to 15 years: Examples of Employment Tax Fraud Investigations - Fiscal Year 2010

Las Vegas Business Owner Sentenced to 15 Years for Employment Tax Fraud Scheme
On November 16, 2009, in Las Vegas, Nev., Robert Kahre and his sister, Lori Kahre, were sentenced to 190 months and 72 months in prison, respectively. Both were found guilty in August 2009 of conspiring to defraud the federal government for the purpose of impeding the Internal Revenue Service (IRS) in its collection of income and employment taxes. According to information presented in court, between 1997 and 2003, Robert Kahre owned and operated six construction-related businesses in Las Vegas and paid employees over $100 million in cash wages. Additionally, Kahre provided a payroll service to approximately 35 other construction contractors who employed thousands of employees. Robert and Lori Kahre devised and used a payroll scheme that concealed and disguised the true amount of income received by his employees and the employees of the companies for which he provided payroll services. Robert Kahre claimed to pay employees in gold or silver coins, but which were actually immediately exchanged for pre-determined envelopes of cash. The face amount of the coins was one-eighth the amount of pay that the employee actually earned and received in the cash envelope. The defendants told the employees that the income was either not taxable or that they should falsely report their income to the IRS at the face amount of the gold and silver coins. During the course of the scheme, cash wage payments of at least $25 million were paid to Robert Kahre’s employees and cash payments of approximately $95 million were paid to the employees of the other contractors. No federal tax withholdings were made from the paychecks, and the wages were not reported to the IRS. The defendants took steps to hide the correct amount of income paid to the employees by using false invoices, keeping two sets of books, using false names on payroll records, making false statements on mortgage applications, and using nominees to conceal assets. In addition to the payroll scheme, Robert Kahre was convicted of evading personal income tax on approximately $12 million in income for the years 1999 through 2002; Lori Kahre was convicted of evading personal income tax on approximately $242,882 in income for the years 1998 and 2000 through 2005.

I understand that this is not a viable tax-avoidance strategy, but I question how the IRS may consider intrinsic value of the coins in one instance, but then ignore the intrinsic value of paper money in the next. "In God We Trust" indeed.

Originally Posted by Miner

Except that he was ultimately convicted two years later and sentenced to 15 years: Examples of Employment Tax Fraud Investigations - Fiscal Year 2010


I understand that this is not a viable tax-avoidance strategy, but I question how the IRS may consider intrinsic value of the coins in one instance, but then ignore the intrinsic value of paper money in the next. "In God We Trust" indeed.

Great find! Thanks for the update.

Well, so much of the old "Gold Eagle" strategy. Sounded like a plan to me.

I guess it's back to the old drawing board, eh?

(and Drawing up my own federal reserve notes?)

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