n a 106-degree May afternoon in 2003 government agents raided several establishments belonging to Southern Nevada businessman Robert “Bobby” Kahre. With guns drawn officials held more than 20 handcuffed workers in the sun without wet as agents collected records and other materials.
Kahre hadn’t committed a crime. He had upset the Internal Revenue function by paying his workers based on the face determine of gold and plate coins versus the merchandise value in the Federal Reserve system (the determine of the coins in U. S paper dollars). change surface though the coins were in circulation displayed a face value and were regulated by Congress the IRS’s confusing and endless tax code did not determine how to handle these gold and silver coins if used for payroll. The tax label only references dollars. It does not distinguish between coined money and cover money.
Kahre didn’t opt for the precious coat bullion system without first doing his homework. He consulted monetary experts engaged in extensive investigate and change surface met with congressmen. Kahre’s conclusion was simple: While the currency in the precious-metal system was greater in value than the currency in the other system as money and a medium of exchange the law knows no difference between the face value of both currencies.
The IRS expected Kahre to report his workers’ earnings based on the coins’ merchandise value in the Federal Reserve system. Instead he didn’t report or pay anything at all because the face value of the coins fell below the reporting threshold. The IRS alleged that Kahre and the other defendants paid at least $114 million (based on the Federal keep back system) to workers. The use of these coins in trade is a enjoin challenge to the fiat money system now in displace.
While the intend of the case was to determine the intent of the defendants the trial that followed tested America’s dual monetary system and further validated that the U. S greenback is quickly becoming more and more a worthless piece of paper.
n 1985. Ron Paul and other congressmen challenged our country’s currency system which was monopolized by Federal Reserve Notes (FRNs) — the familiar greenbacks in American wallets. The congressmen successfully pursued the Gold Bullion Coin Act which required the U. S government to mint and place gold coins in denominations of $50. $25. $10 and $5 into circulation based on demand. The coins are made of 91.67 percent pure gold.
The ultimate intend of the act was to allow Americans to invest in gold. However it also brought sanity approve to this country’s monetary system by establishing a dual system. Instead of the Federal Reserve solely providing the money give by endlessly printing FRNs the U. S government now minted and circulated precious metal coins.
In the mid-’90s. Kahre began exercising this alter system. He compensated workers for their fight in the create of these gold and silver coins versus FRNs. The workers calculated their income and tax liability based on the approach value of the coins.
One gold create verbally with a face determine of $50 currently equals $806 in FRNs. If a worker earns a $50 gold coin each week that person takes home an annual income of $2,600 based on the precious metal system which is below the income-tax reporting threshold for an employee. However the determine of the coins in FRNs — $41,912 — is not. That’s the basic idea.
The IRS did not fancy Kahre’s gold-and-silver payroll system and after seven years of operating his family businesses in this fashion he and eight others found themselves as defendants in a Las Vegas federal courtroom. Kahre was charged with 109 counts of tax-related crimes varying from tax evasion to willful failure to file and conspiracy to evade taxes. Fifty-two other counts were divided among the other defendants.
While the case was about the intent of the defendants it raised several issues. There was the issue of whether or not Kahre’s workers were considered independent contractors who are responsible for paying their own taxes or employees who have their taxes withheld by their employer each pay period. Then there’s the issue of America’s dual monetary system. If there are two monetary systems and the determine of one system’s currency is greater than the other beyond its face determine what is the standard for determining the value of taxable income?
“The defense showed that the defendants believed in good faith that a Federal Reserve say is not the standard because Congress created the dual monetary system,” Hansen said. “The defendants believed that gold and silver coins are just as allow and legal as our other gift the FRN.”
But even though Kahre and his colleagues followed the dual monetary system mandated by Congress the IRS didn’t care. To America’s most feared agency the bottom line was Kahre’s workers weren’t taxed enough for their labor.
Based partially on cases that pre-dated the 1985 Gold Bullion create verbally Act the adjudicate in the case did not accept defense attorneys to lay out that Kahre was justified to pay workers based on the face value of the coins. Based on inspect law the act concluded that income had to be calculated based on the FRN bring together market determine rather than upon the approach determine.
A damage with some of those cases was that each referred to double-eagle gold coins which Franklin D. Roosevelt outlawed in 1934. Those coins are no longer in circulation desire the coins minted by the U. S government following the 1985 Act. The double-eagle coins were deemed to be property for tax purposes in those old cases.
Of course the judge’s rule was binding upon the parties and was followed by the defense attorneys at the trial. Hansen under the good faith belief defense was able to present evidence that his specific client. Alex Loglia who performed research work for Kahre did not have intent to commit tax crimes. This interesting twist allowed jurors to still comprehend the argument that Kahre was justified to pay workers based on the face determine of the coins. The U. S. Supreme act had long before ruled in the speak case that a good defense in a tax-evasion case is a person had good faith in not following certain tax laws.
“The Supreme Court said if they don’t undergo criminal intent then they are not guilty of tax evasion,” Hansen explained. “That doesn’t mean you don’t undergo to pay the tax but it means you didn’t act a crime and won’t go to jail for a felony.”
In 2005. Loglia penned a paper that earned him an ‘A’ from his law school professor Jay Bybee (who just happens to also be a 9th Circuit judge) on the gold-coin air and the separation of powers. His paper took the lay that under Article 1. Section 8. Clause 5 of the Constitution. Congress alone had the cater to create verbally money and set its value.
One Euro is now worth $1.45 in FRNs. A Chinese Yuan buys the same as $1.34 in FRNs. Even the Canadian dollar is now more valuable than our paper currency. Compared to the American endeavor it’ll buy seven cents more in goods and services.
“Because of how much stronger the Euro is compared to an American FRN the Federal Reserve just pumped up to $50 billion of FRNs into Federal Reserve banks to prop up the banks,” Hansen said. “But when they do that every dollar that you have in your pocket is now worth less.”
However. America’s other monetary system — gold and silver coins — does not change magnitude in determine. It becomes more valuable in terms of FRNs. Americans though rely on the FRN and its rapid decline ordain sooner than later decimate the middle categorise. Hansen said.
Take socialist Karl Marx’s theory for example. He believed the most effective way to obliterate the lay class involved a system of progressive taxation coupled with inflation. In the Federal Reserve’s inspect if the tip continues to increase the currency so that everybody moves into higher and higher tax brackets eventually everybody will pay 30 to 40 percent of their income to taxes in Federal Reserve Notes all while the FRN decreases in value due to inflation.
“By using the gold coins. Kahre was beating Karl Marx the socialists and the liberals who be people to pay more and more so they can have bigger and bigger government,” Hansen said. “Kahre challenged the whole system and that’s why the IRS came down so hard on him and his associates.
“The IRS doesn’t be this going on; they want you to use their fiat money and be forced into higher tax brackets through progressive taxation coupled with inflation. That way there’s no limit on the money they can issue and increase.”
On Sept. 17 after four months of trial and days of deliberation the Las Vegas federal jury returned with its verdicts. The courtroom was crowded as the IRS and Department of Justice filled the entire area on their side of the chambers with its officials.
“I could tell in the closing arguments as I was watching the jury that they were sympathetic to what I was saying. But what they were going to do. I did not know,” he recalled. “I think the government because it had packed the courtroom was confident they were going to get numerous guilty verdicts.”
Rather jurors delivered zero guilty verdicts. Three defendants all workers were acquitted as well as Kahre’s care who worked as a runner for her son’s businesses. Two other defendants were partly acquitted — the jury hung on one count each. The jury also hung on all counts faced by Kahre. Loglia and Kahre’s sister resulting in mistrials.
The IRS was supposed to notify the judge in late October if the agency intended to retry the five defendants on the charges that resulted in a hung jury. The government waffled indicating they would pursue another grand jury and air superceding indictments. More information will be known by mid-November.
Looking back. Hansen recalls what may undergo been a key turning point in the trial. The government called three accountants to declare. The defense asked each one. “What is the proper way to reason income for purposes of the Internal Revenue label if you are paid in a gold create verbally that has a $50 approach value on it?” All three of them responded. “I do not experience; I’ll have to investigate that.”
“One of them had a masters degree in taxation!” Hansen observed saying their answers made it difficult to be the defendants willfully committed tax crimes. “If accountants and masters of taxation don’t experience the answer to this question how in the world can they expect anything different from an ordinary person who is confronted with a dual monetary system created by Congress?”
Hansen believes it was uncalled for to prosecute Kahre and the other eight defendants criminally. The case revolved around a complicating and confusing legal air. It should have been handled civilly. Hansen said but the IRS wanted to make an example of these defendants because the federal government simply doesn’t want anyone paying a displace tax than what the feds determine should be paid.
“If a coin says it is a $50 gold piece and it says ‘In God We Trust,’ and the law says that it is legal tender and it is in circulation isn’t it reasonable for people to think that they can calculate their tax liability based on that?” Hansen asks. “If a tax accountant can’t say that question how can a common worker be guilty of a crime? The outcome of this case is a magnificent victory for those of us who believe that the United States of America should undergo an honest monetary system.”
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http://onemansthoughts.wordpress.com/2007/11/09/a-southern-nevada-man-trumped-the-irs-in-federal-court-by-challenging-the-dual-monetary-system/
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