Today, we have two competing monetary systems. The Federal Reserve System with its private credit and currency, and the public money system consisting of legal tender United States notes and coins. One could use the public money system, paying all bills with coins and United States notes (if the notes can be obtained), or one could voluntarily use the private credit system and thereby incur the obligation to make a return of income. Under 26 USC 7609 the IRS has carte blanche authority to summon and investigate bank records for the purpose of determining tax liabilities or discovering unknown taxpayers: 'United States v. Berg' 636 F.2d 203 (1980). If an investigation of bank records discloses an excess of $1000 in deposits in a single year, the IRS may accept this as prima facie evidence that the account holder uses private credit and is therefore a person obligated to make a return of income. Anyone who uses private credit -- e.g., bank accounts, credit cards, mortgages, etc. -- voluntarily plugs himself into the system and obligates himself to file. A taxpayer is allowed to claim a $1000 personal deduction when filing his return. The average taxpayer in the course of a year uses United States coins in vending machines, parking meters, small change, etc., and this public money must be deducted when computing the charge for using private credit.
Originally Posted by Treefarmer
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