TheToadvc

Remember - this thread was started with a false subject title, based on an article posted on 6/12/2012. Please, don't waste our time with old news. Ribbit

New to the Tax Discussion forum, huh? What you have quoted is the current standard definition of capital assets and capital gain rates under IRS Code Sections 1221 & 1222. We have been discussing these sections and their relationship to the exchange of foreign currency for about 4 years on this forum. There is an on going dispute as to whether these sections apply to foreign currency investments. I believe that if the currency exchanges are covered by IRS Section 988, they will be treated as ordinary income at the current rate of 35%. Others don't like that result (for obvious reasons) and choose to believe that the Iraqi dinar cash in will be taxed at the 15% rate by the IRS. However, to date, no TA (tax advisory) or PLR (private letter ruling ) has been issued by the IRS. One VIP contributor who comands total respect on this forum and has posted over 300 advisories on the subject is Mark at ExecConsult. Mark is an Estate Planning Attorney in Wichita, Kansas and is highly respected on this forum. I was with the Wichita IRS as an Appeals Officer in the late 70's and settled estate planning cases. I have followed the posts of ExecConsult for two years and I value his opinion, but I am now retired from the IRS so I do not speak for them. I hold dinars for long term investment as well as many IRS officers that I know. I can tell you that the way the IRS works is that the issue of tax treatment of the dinar RV will be unsettled until a large case against a taxpayer is brought before the US Tax Court and adjudicated. Mark has filed a request for an administrative tax treatment determination, but as far as I know the IRS has not answered him specifically on the dinar exchanges. Until the IRS rules, I beleive there are reasonable grounds for taking both positions (capital vs. ordinary) on this issue. Again..... I do not speak for the IRS. I hope this helps. You should click on the members tab and type in "ExecConsult" in the search box. This will lead you to Mark's posts and you can research everything that has been discussed on the tax issue.

Illegal aliens have been making fraudulent claims for fictitious exemptions for decades. The IRS says it knows all about this scam at www.irs.gov and has corrected thousands, if not millions of returns. Before I retired, I was one of the coordinators of the Child Exemption Scheme litigation at the IRS. Very few taxpayers were ever brought to trial. Almost none resulted in fraud penalties. Many taxpayers were primarily illiterate aliens who were told they could claim as many children as they wanted and they were totally ignorant of the law. The fraud comes from unscrupulous tax return preparers who promoted the scheme. There were many trials and penalties issued against fraudulent return preparers. We censured hundreds of return preparers who were caught claiming fictitious exemptions for their clients. The scheme of claiming fictitious exemptions became so great during the 90's that there was an entire task force dedicated to the education of return preparers and enforcement of multiple exemptions returns. The IRS computers kicked out thousands of returns for examination. 90% settled with the IRS with no penalties. Those that got to my office were fraudulent tax preparers who were trying to avoid sanctions from the IRS that would put them out of business. I recommended the really bad ones be put out of business and several went to trial and were prosecuted for fraud. The outcomes were seldom published in the press. Since my retirement, I am told that it has gotten worse. The ITIN was just being introduced and I can imagine that more illegal aliens were using it to get refunds. But, I can't imagine that it has enabled more fraud. On the contrary, it identifies the fraudulent filer and gives the IRS information on which returns to audit. I would question the integrity of the "tax consultant" in the Indiana news report. Why didn't he go to the IRS with his claims? He probably prepared all those returns........ why did he allow the fraudulent exemptions? A preparer's job is to require sufficient documentation before he claims a deduction on his client's return. There have been thousands of IRS Seminars all across the nation, reminding prepares of their responsibility. I used to teach them. They can't just claim a deduction because their client says they have multiple children. They must verify their accuracy. I suspect the preparer was in trouble with the IRS for preparing fraudulent returns and he was being proactive before the IRS began it's investigation on him. So, to comment on the video clip, the investigative news reports on exemption tax abuse is not new. They come out every year during tax filing season. I just wish they would not blame the IRS for not catching all the fraudulent activity. Just like all government agencies, the IRS is understaffed and depends on fear of detection to keep the masses filing accurate returns.

I have been reading this forum for over a year now and never commented. I am a retired Treasury Officer and now, I too am suddenly hopeful for an RV before September. This is the argument which I posted in the Denver Dinar Group forum: OBAMA DROPPED A HINT THAT HE IS PLANNING THE DINAR RV SOON, WHEN HE PROPOSED THE "BUFFETT RULE". Those of you who are following Obama's election year schemes, know that he is calling on Congress to increase taxes on millionaires. Reviving a proposal he first pitched last September, he wants Congress to pass a 30% tax on American citizens who earn over one million dollars in a year. This is referred to as the "Buffett Rule". Everyone is arguing that this could never pass. But I'm not so sure. It would probably be in the form of an Alternative Minimum Tax (AMT) on income that is currently being taxed at 15% capital gain rates. Nobody likes it when millionaires only pay a 15% tax on their income; even Republicans feel it should be higher. Obama has the GOP by their necks here because if they oppose this AMT, then they can be accused of causing a class war. During his election campaign Obama can claim that he tried to eliminate the debt but the GOP continually refused to tax the millionaires for their fair share. SO, WHAT DOES THIS HAVE TO DO WITH THE DINAR RV? Well, this is completely my opinion, but if Obama can get this passed, I believe Timmy Geithner, will immediately push the button on the RV. There will be no debates as to the tax rate.......... all of us millionaires will be forced to pay at least 30% of the RV gain, based upon the Buffett Rule. The IRS will not even need a Tax Advisory determining the tax treatment of foreign currency exchanges. A congressional ruling will already have determined the tax rate. Sounds unbelievable, but think about it........... the Buffett Rule may be the answer to solving the National Debt and ultimately extending Obama's presidency for another four years. He will be very popular. We know that thousands of US citizens have dinars and most are not being held in corporations or have been sent out of the country. Some of us also believe that for years, The US Treasury and not Shabibi controls the decision on when Iraq needs to RV. So, it makes sense; pass the Buffett Rule and the Government gets 30% of the RV. We still get rich and the Government does not have to litigate the tax rate issue. PROBLEM SOLVED. That's why I think this RV will happen before November, 2012. JMO