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Thread: Basis in Law

  1. #21
    I guess the question about value pertains to the definition of income; what is it? I know the statutes define it, but I don't have time to refresh my memory right now. Is receiving lawful money receiving income?

  2. #22
    Speaking for myself I have already refused to be drawn into G's premise about value. It scarcely shows at all in the Code like Treefarmer has shown us.

    I will keep it simple about being in contract with the Fed, or not.

  3. #23
    Value is subjective. According to NYG's theory, if I am required to accept FRN's at gunpoint, then I have not placed any value in them, they are therefore not taxable. Thank you to all in this forum, I now place my value in Lawful Money.

  4. #24
    Quote Originally Posted by Seosaidh View Post
    I guess the question about value pertains to the definition of income; what is it? I know the statutes define it, but I don't have time to refresh my memory right now. Is receiving lawful money receiving income?
    Tax is derived from property.
    Tax is assessed against the value of something and not the property itself.

  5. #25
    Senior Member Brian's Avatar
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    Quote Originally Posted by shikamaru View Post
    Tax is derived from property.
    Tax is assessed against the value of something and not the property itself.
    The income (gain or profit) is derived from the property (ie: rent from renting a house, gain realized by employing labor combined with capital to produce a product). It is then measured by the $$ amount above and beyond the costs of producing. (The house is the property, The labor is related to the employer/employee relationship or said differently slave master/slave relationship, Capital is also property)

    If you have a business that is incorporated you pay a tax on that privilege that is measured by the income (gain or profit measured in dollars). The excise is on the privilege and is measured in dollars.
    As the wage maker your labor is part of you. If you use the treasury issued medium of exchange that falls under federal common law and IS a direct tax. However if you use the quasi federal/private Fed script as payment for your labor that is a privileged activity that falls under the excise power of the government via the commerce clause.

  6. #26
    Quote Originally Posted by Brian View Post
    The income (gain or profit) is derived from the property (ie: rent from renting a house, gain realized by employing labor combined with capital to produce a product). It is then measured by the $$ amount above and beyond the costs of producing. (The house is the property, The labor is related to the employer/employee relationship or said differently slave master/slave relationship, Capital is also property)

    If you have a business that is incorporated you pay a tax on that privilege that is measured by the income (gain or profit measured in dollars). The excise is on the privilege and is measured in dollars.
    As the wage maker your labor is part of you. If you use the treasury issued medium of exchange that falls under federal common law and IS a direct tax. However if you use the quasi federal/private Fed script as payment for your labor that is a privileged activity that falls under the excise power of the government via the commerce clause.
    Oh, that's right! And direct taxes must be apportioned, therefore no income tax ought to be assessed against income of lawful money. But then the question arises, if someone pays you in FRN's, did you receive private credit?
    Last edited by Seosaidh; 10-18-12 at 07:25 PM.

  7. #27
    Quote Originally Posted by Seosaidh View Post
    Oh, that's right! And direct taxes must be apportioned, therefore no income tax ought to be assessed against income of lawful money. But then the question arises, if someone pays you in FRN's, did you receive private credit?
    More, did you endorse private credit?

    Consider the law like a mirror. If you project forgiveness...

    PPS: forgot to mention... along with that check I sent certified a copy of my Default Judgment published at county level.

    Nickname

    ----- Original Message -----
    From:
    To: David Merrill <>
    Sent: Thu, 18 Oct 2012 17:03:14 -0000 (UTC)
    Subject: mortgage

    you may recall, we're very behind in our mortgage payments.
    So much so that mortgage co. was sending nasty letters, and even returning a check uncashed because it wasn't for the full amount due. I have been R4C'ing just about everything from them.

    Well, today I discover they have cashed our latest check:!
    (attached)

    Seems we may not be in default after all.
    I just love it when somebody applies my intellectual property to save their home from foreclosure.

  8. #28
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    so much to respond to, this is great, I am really enjoying this discussion. Lets start off with something basic to my question, value.

    I am trying to simplify multiple code sections and regulations to make it easier to understand. I could quote a series of code sections, but I am trying to explain it is the most basic way. David provides a general overview of his theory without referring to code sections, regulations and case law, so I figured it was the easiest way to do it. I am a tax lawyer by trade, and know the code and regs quite well. However, I prefer to explain in plain English, in a way I hope all can understand. Sure you can search for value, but you won't find it used in the context I am using it, but it is correct. Think about this, you perform a service for someone. The service you just performed has a value to it, and you expect to be compensated for that value. You assign an amount to the worth of that work, typically this is your salary, or hourly wage. Under the code, the value that is assigned to that work is what is subject to taxation. It would be taxable, unless you are donating time to charity, and do not expect to be paid. You are in effect donating the value of your time. [As an aside, in essence you can think of charity work as earning a dollar value for services rendered, but donating the value of your services, resulting in no income recognition as it is a wash - Income = $100 charitable deduction = -100 : income less charitable deduction = 0 - you can not deduct the cost of your labor against your income to offset, that is not permitted deduction]

    Now let's get back to value. I do a job. Let's say I expect to get paid $5,000. At the completion of the job, I have several options:
    1) They offer $5,000 in FRN's
    2) They offer me a car worth $5,000
    3) They offer to pay me in EURO (Aprox 6,500 of them)
    4) They offer to give me a corporate bond, face value of $5,000, with 3% interest payment for 10 years
    5) They offer to give me a computer worth $5,000
    6) They offer me gold, silver, or other like items of value worth $5,000
    7) They offer to pay of $5,000 of an existing loan
    8) They offer to supply other services back to me, worth $5,000
    9) They offer me $5,000 of diamonds
    10) They give me a $5,000 gift card
    I could go on

    In all the above cases, I have income of $5,000. This is attributed to me when the amount is due, and I have control over it, either through actual receipt or constructive receipt. It is the receipt of value that causes the taxable event. Again, actual receipt, or constructive. When I say constructive, it implies you have control over the asset, but it may not be physical control. For example, number 2 above, I have title, but the car is still parked with the person giving it to me, I am in constructive receipt of it, even though I do not have physical possession.

    My point here is that when you perform work, you expect to get something of value in exchange for your labor. This value is quantifiable, and typically paid in USD. Now days, this is done mostly via wire transfer (Direct Deposit) or check, but cash also works. [Although I will leave cash out of this, as most people who work for cash do so, to stay unreported, and will not declare that income]. Regardless of how this value is transferred to you, it is taxable income. What ever you do with it after you get it, or what ever form you get it in, it is still taxable to you upon receipt [constructive or actual].

    So that is what I don;t understand, converting or redeeming into lawful money, does not change the fact that it is still earned. I am assuming you will now go back to y charitable deduction simplification. You may now agree with my premise on value as taxable, but then sy you are entitled to deduction against redeemed lawful money. This is my problem, I can not find any code section, regulation, or case that supports a deduction for this. Can anyone show me one as part of the tax code or regs. Tax law is derived from the IRS code and regulations, and case law interpretations of those. So far, the only case law I have found does not support Davids position.

    As for the proof David posted, of his banker friend. I will tell you, as a Lawyer in NYC, and being subject myself to NYS/NYC withholding, in looking up the withholding rates, the amount of the refund reflects withholding that would indicate this person is not high up in the organization, and is an entry level employee. While this person may be an authorize tax preparer, they are not a CPA or Lawyer. They are a Junior person, with little experience, and I would say a very basic understanding of the tax law. Again, based on the refund amount, I don't think this person earns enough to even be on the radar of the taxing authority. I used a speeding analogy last post, but here is a better one, I think.

    Suppose I am a serial killer. I kill 10 people without getting caught. I am good at what I do, and leave no evidence. Using your logic, I could say that Murder is not a crime, because I have done it 10 times before, but have never been caught, or even questioned. Therefore, it must not be illegal. This is the same as you preparing a low value tax return, claiming a fictitious deduction, getting a refund, and saying the deduction was obviously correct, as the IRS paid the refund. Simply getting the refund is not proof of anything. I have stated before, this will increase your audit risk, and that may result in the IRS examining your returns some day, but who knows when that will be. The IRS is more concerned with large dollar tax cheats, than someone who scams a few thousand dollars. They just don't have the resources.

    You could ask for a PLR (Private Letter Ruling) in which the IRS reviews your position and provides analysis, however if the IRS does not agree with you, you will still be bound by their decision). You can get a lawyer to write you a legal opinion, or you can do nothing and hope the IRS never catches you.

    Another thing I said, and really mean, I would love to legally pay no tax, and if I can find something that is supported in the law, that would absolve me of my tax obligation, I would want to know about it. But I need to be able to support my position with the existing tax law, and here I am having a problem. There is nothing I can find in the tax code, regulations, or tax law that supports this. In fact case law seems to imply that regardless of form, it is taxable, and that FRN's are lawful money, and that all the provision you site is good for is swapping FRN's for FRN's. If you have a $100 bill in bad condition, you can go to the fed and redeem it for a new $100, redeeming you lawful money for more lawful money. However, I don't want to debate that issue, and until now have steered clear of it. Please just focus on part two, and why the act of redemption for lawful money results in that money being nontaxable, when clearly it has value, and what you got, that you are exchanging also had value.

    I hope I addressed the points above. I will not entertain the position that the tax law doesn't apply to you. If you reside in any of the 50 states, regardless of citizenship, you are subject to the tax code. Heck, even foreign workers, here on work permits are subject to US tax. And if you think tax only applies to government workers or some limited subset of employees, I will not debate that absurd position. It has been proven wrong, even among people who argue other positions on not being taxable. I also will not entertain the 861 position or the OID scam, all bad positions, and based on a bad reading of the code, and a lack of understanding of legal writings.

    I do really want to continue this discussion, as this theory fascinates me, and I would like to understand the basis for the position, although focused more on why the redemption results in a tax benefit.
    Last edited by NYGMan-Tax; 10-19-12 at 01:48 AM.

  9. #29
    See, that went right over my head. Whoosh! Lol

  10. #30
    Senior Member Treefarmer's Avatar
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    Quote Originally Posted by Treefarmer View Post

    Earlier today I dug out my searchable copy of the 1986 IRC and searched for the term "value".
    "Value" occurs there 3,416,179 times, usually in connection with "interest" or "estate".
    Then I searched for "value tax", which occurs not at all, and neither does "taxable value", "tax value" or "inherent value".
    Then I searched for "tax on value", which occurs once:
    I just realized that the number 3,416,179 is the total word count of all words in that copy of the 1986 IRC, and that the word counter will not count specific words.
    So if a word occurs zero times or only a few times it can be counted manually.
    But "value" occurs so may times that there's no way to count it in a practical manner, absent a programmable word counter.

    I'm using OpenOffice dot org.
    If anyone knows of a word count feature which will count instances of specific words in that software, please let me know.
    Thanks.
    Treefarmer

    There is power in the blood of Jesus

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