The question of how much evidence of "redeeming lawful money" to attach to a Form 1040 filing is an interesting question. Should one attach none, one, some, or all? For TY2008 I attached none; just entered the correct amount of federal income, which was much lower than amounts deposited in the bank, and I've had no issues.

Personally, I think you could succeed with any of those options. Now let's say you redeemed lawful money only part of the year but took a full LM deduction as if you did it all year, and stood your ground on that. Make them prove their claim. What man from the IRS will step forward and bring forth a claim that some deposits were private credit of the Fed and not lawful money? Yeah, that's not gonna happen in public, in open court. That'd mark the beginning of the end for the tax scam. Once they know .. that you know, that you're aware of the scam they're running and likely have copies of redeemed lawful money paychecks in your possession, it seems fairly obvious to me they'll let you go in favor of easier prey.