PROOF your IQD Trade is NOT taxable

[darkstar]

It is apparent you enjoy stroking your own ego, so I will refrain from arguing your point. The merits of the 16th Amendment have been argued and perverted for nearly a century: it is fruitless for us to argue it here. That said, you did not answer my question (chosing rather to challenge my assumption and miss the point).

Do you agree or disagree with the notion of a consumption tax over a progressive income tax?

My assumption notwithstanding, I thought it was a simple question.

No sir. Not at all. I'm truly sorry I come off that way. It comes perhaps with the baseless bashing I often get for presenting the truth. But, sorry for that.

I do prefer a consumption over a progressive income tax. Look at what the gentleman below says:

Be thankful we live in a Country where we don't have to pay 75% of it to the government.

Stay tuned my friend......stay tuned.

What often provokes bile on my part is the ignorant insistence and mindless banter such as: "Will a Tax Attorney pay your tax if he's wrong or sit in prison for you?"

What a ridiculous statement. Mr. Nelsen, perhaps you could tell me why one would go to prison for not paying tax on a currency exchange. When you go to Europe for 2 weeks, and then return, do you pay tax on the change in relative value of your base currency? If not why not? How would that cost basis be calculated? What if you went for 16 days? What if you exchanged for Indonesian Rupiahs in-between, profited on one, and encountered loss on the other? ATTENTION: IT IS NOT TAXABLE!!!

Stop echoing mindless, baseless banter! I have yet to have anyone present anything here to the contrary of what I present. Why do you think that is?

If you want to make someone angry, tell them a lie. If you want to make them furious and incensed, tell them the truth.

He who has an ear let him hear.

[talion1011]

Here is my rebuttal.

First, a treatment on taxable income (in which darkstar is claiming only exists for those who hold public office.. which makes no sense at all.)

US Code Title 26, Subtitle A, Chapter 1, Subchapter A, Part 1.1 states that "taxable income" is imposed on individuals for the various filing statuses (head of household, married filing jointly, etc.)

Link here: http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000001----000-.html

US Code Title 26, Subtitle A, Chapter 1, Subchapter B, Part 1.63 gives the definition of "taxable income" as such: In general, "the term 'taxable income' means gross income minus deductions allowed by this chapter (other than the standard deduction.)" I am paraphrasing, and it goes into more detail.

Link here: http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000063----000-.html

US Code Title 26, Subtitle A, Chapter 1, Subchapter B, Part 1.61 defines gross income as such: In general, "gross income means all income from whatever source derived.." Once again, I am paraphrasing. A list of examples is given, but the document does state that it is NOT limited to the list.

Link here: http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00000061----000-.html

So a brief recap in regards to what you are liable for in regards to tax, based on these definitions. First off, regardless of what individual filing status you have, you are liable for taxes on taxable income. Taxable income is your gross income minus deductions. Your gross income is any income you made, regardless of it's source. Exchanging foreign currency for USD is a transaction with a potential for a gain or loss based on your cost basis, so if you do make money, it is part of gross income.

Now, on to section 988.

Section 988 has a nice title of "Treatment of certain foreign currency transactions" as darkstar pointed out. Darkstar chose to point out the word "certain" and implied that only "certain" transactions are taxable. However, I would suggest that a careful reading of the rest of the document does not imply that. Rather, distinctions are made between trading forex contracts and actual cash exchanges.

Link here: http://www2.law.cornell.edu/uscode/uscode26/usc_sec_26_00000988----000-.html

If you scroll down to section E, you'll find (according to my reading.. please correct me if I'm wrong) that all of the preceding sections are irrelevant. Section E1 states: Application to Individuals- In general, the preceding provisions of this section shall not apply to any section 988 transaction entered into by an individual which is a personal transaction.

E2 goes on to say (paraphrased to cater specifically to us): If such transaction is a personal transaction, no gain shall be recognized for purposes of this subtitle by reason of changes in exchange rates after such currency was acquired by such individual and before such disposition. The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200.

So, if you broke your dinar down to 50 dinar denominations, and traded them in 1 at a time per transaction, you would technically recognize no taxable gain since your profit would be less than $200 per transaction. Of course, if you do this hundreds of thousands of times, flags might be raised and the IRS might hunt you down for tax-evasion.

I've read that in this particular instance, where the currency exchange is a personal transaction, that any gains over $200 are classified as a capital gain. (source here: http://www.maximadvisors.com/knowledge-library/international-tax-planning/US-Taxation-Foreign-Currency-Gains-Losses) However, after searching through section 988 and the TaxPayer Relief Act of 1997 (which amended section 988) I still can't find the clause that states that. Any assistance in that matter would be appreciated.

As far as darkstar's argument though.. I think the definitions (with links/sources) suffice to debunk him. Frankly put, I don't know where he's coming up with those statements in Subtitle A.. though Subtitle A is a fairly large chunk of text.

[talion1011]

Will a Tax Attorney pay your tax if he's wrong or sit in prison for you?

From the IRS point of view (according to the IRS worker I talked to on the phone and asked the same question) you are ultimately responsible for your taxes. If you hire an an accountant or tax attorney, and they mess up your income taxes, you'll have to pay the remainder plus interest. So either get multiple opinions, or find an accountant or tax attorney who offer a "money-back guarantee" if they are wrong. Though in those instances, they'll probably lean towards the "safe" zone and make you pay the maximum possible tax brackets just so they don't end up liable.

[talion1011]

When you go to Europe for 2 weeks, and then return, do you pay tax on the change in relative value of your base currency? If not why not? How would that cost basis be calculated? What if you went for 16 days? What if you exchanged for Indonesian Rupiahs in-between, profited on one, and encountered loss on the other? ATTENTION: IT IS NOT TAXABLE!!!

Actually, it is taxable if you net a profit of $200. Your cost basis is whatever you bought the financial instrument for, and your capital gain/loss is based on what you sold the instrument for in USD. Complex situations does not change the situation. Daytraders constantly conduct round trips in the same stuck several times a day, resulting in complex wash sales and odd lot transactions. That doesn't mean they don't need to report the taxes on that.

With that said, just because something is taxable does not always mean it is reported. It's all about the numbers. The IRS is not going to make an effort to audit you for making $300 while traveling in Europe because of favorable changes in the exchange rate. It would be time consuming and very difficult for them to prove it. However, with the potential millions of dollars made on the IQD if it RVs, it would be well worth the while of the IRS to pursue those who prefer to conduct tax-evasion. Especially since it's decidedly more difficult to hide several million dollars along with it's paper trail.

[betterindinar]

Thanks darkstar. This kind of information is great. I started learning about our history and law at http://www.teamlaw.org Team Law seems to help people learn the law for themselves. You might be surprised when you learn about who our "Government" really is and how to reseat the Original Jurisdiction Government.

[zoomzoom]

Just a little off topic

In a truly free society no individual should ever be in the position to owe anything to any goverment, otherwise there is no freedom. In afree society, governments should be protecting and fostering the individual's freedom of choice. The moment that a government makes an individual directly liable for taxes, that individual looses his/her full right to choose. The only moral tax is a consumption based tax or fee to restore the freedoms supported by the Constitution. With the Dinar revaluation there is a great potential to turn a lot of us into criminals because of these confiscatory taxes. With consumption taxes or fees, the government would still get the income, through our spending and allow us full freedom to do so. It is so sad and aggravating that our elected representatives who are elected to look after our interests do not do so, but end up fleecing us instead.

[jocko129]

you still have not answer me,tax or no tax???

[jocko129]

this all contradict the rumor that i heard, that we as investors we are helping a nation get back on theirn and therefor, would be any taxes. quoted from a friend

[betterindinar]

If one is not required to pay a tax according to the tax code but still does, they are volunteering that money. That is what the majority of people do, they give away their money when they may not be required to. This is why you should read the tax code and the regulations that go along with it. Do not let someone do your thinking for you. The only reason the world is in the mess we are in is people are depending on others to think for them. The law is easier to learn than we have been led to believe. Because of this most people have made themselves slaves.

[AliBaba]

Irwin Schiff also asserted that payment of income tax is voluntary. Perhaps he volunteered to enter the federal penitentiary.

[darkstar]

talion1011,

I REALLY appreciate your thoughtful rebuttal. This is precisely the kind of exchange I am looking for for this forum. Point.....Counter Point......etc.

All you have brought up are excellent points. Let me point out a couple of things to keep in perspective. Consider the following definition of Gross Income, and pay particular attention to the TERMS "including" and WHERE they are located in the definition's structure:

Sec. 61 Gross Income Defined

(a) General definition

Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items:

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;

(2) Gross income derived from business;

(3) Gains derived from dealings in property;

(4) Interest;

(5) Rents;

(6) Royalties;

(7) Dividends;

(8) Alimony and separate maintenance payments;

(9) Annuities;

(10) Income from life insurance and endowment contracts;

(11) Pensions;

(12) Income from discharge of indebtedness;

(13) Distributive share of partnership gross income;

(14) Income in respect of a decedent; and

(15) Income from an interest in an estate or trust.

You have to remember, a scheme to trick an entire nation into paying into a system which is truly voluntary (by virtue of it being an indirect excise on the taxable activity of earning "gains, profits, and income" in association with the "United States") must be very cleverly crafted, and sold to the "targets" slowly and incrementally over time......but I digress.

In the definition above, you see that gross income basically is "compensation for services," and that "compensation for services" is made up of a whole litany of other things which are in fact there to act as a "Red Herring" to distract you from ALL that is really the target of the tax which is "compensation for services." We'll get to the (but not limited to) language a little later.

Now, as many of you may know, Title 26 of the United States Code has NEVER been enacted into "Positive Law." That means that the Code compilation of 26 USC is only prima facie evidence of the large body of law which is extant. What this means, is that if you really want to get down to what is binding and what is not with regard to Internal Revenue, then you must seek the original language from the "Statutes at Large" which are then codified into the IRC. The term "compensation for services" is a term which comes from the Classification Act of 1923, and its contents and meaning have not been repealed.

Here's how they present the following definitions:

1.

[talion1011]

Darkstar, I believe you are arguing the theory and semantics of the wording "income", and stating that the IRC does not clearly define income. However, realistically, every single person who has ever opted not to pay taxes based on this reasoning has lost in court and has paid fines or jail time.

But let's argue about the semantics a bit. Income is never defined in IRC, and the reason for this is that income is never an isolated term that requires definition. There is either taxable income (which is defined by gross income minus deductions allowed by the IRC) and gross income is defined by any profit/gains that are derived from any source- including (but not limited to) compensation for services (which allows no such deductible such as labor or value of such labor). There is no need to define income, because the IRC does not deal specifically with "income." It deals in terms of taxable income or gross income (or adjusted gross income, which is also defined.)

Specifically in regards to the IQD, a profit off of the exchange of foreign currency obviously does not fall under "compensation for services", but gross income is not limited to that. Nor is it limited to the list of examples encompassed in Section 61. Moreover, profits resulting from an exchange of foreign currency for USD IS covered in section 988 and is covered as capital gains (based on various interpretations), and as such, the taxation of capital gains is clearly defined. With an exchange of currency, there is a clear "cost" for the purchasing of such financial instruments (what you paid to buy the IQD in terms of USD) and a clear sale price (what you were paid in USD for the IQD) resulting in a sale of a financial instrument. So, in this particular instance, you basically have something that you bought at one price, and sold at another.. for either a gain or loss.

As I've mentioned, various interpretations of section 988 state the taxation falls under the capital gains taxation tables. I can't prove it, because I haven't found it myself yet though.

[zoomzoom]

Darkstar, you have expressed what I have found to be true about not only our government but all governments at all levels. I cannot believe the level of ignorance about an entityt that effects us all at all levels. There must be a general awakening of awareness about our individuality and then we can throw the shackles off. I don't want to give governments any dues by arguing over meanings of one word or another. I catagorically dismiss their presumption to act on my behalf, period. In my view governments exist to enhance my ability to choose with the understanding that there are consequences, either good or bad. They should be there to exact revenge on my behalf against those that would limit my freedoms. All too often governments are the ones limiting my freedoms. Therefore forced taxation, including income tax, property tax, forced searches( airports) are against my freedom to choose. The fact that they use subterfuge to have the population accept these taxes, only makes it that much more heinous.

[Hopefulskeptic]

No sir. Not at all. I'm truly sorry I come off that way. It comes perhaps with the baseless bashing I often get for presenting the truth. But, sorry for that.

I do prefer a consumption over a progressive income tax. Look at what the gentleman below says:

Thank you sir: both for the clarification and your opinion.

[Den56]

Sorry Mr. Know-It-All, but YOU, NOT I, am EXACTLY the PROBLEM !!!!

Here's the link to IRS Publication that I was talking about . . .

http://www.irs.gov/pub/irs-pdf/p525.pdf

see Page 33, paragraph 4 which CLEARLY STATES YOU are WRONG !!!!!!

"Foreign currency transactions. If you have a gain on a personal foreign currency transaction because of changes in exchange rates, you do not have to include that gain unless it is more than $200. If the gain is more than $200, report it as a capital gain.

[Den56]

Here's the reference to YOUR insult to me on page 3 . . . . .

Quote:

In either IRS Publication 505, or 525 I don't remember, on page 33, paragraph 3 . . . it states that "on any foreign currency transaction which benefits you by over $200 must be reported as income". (My paraphrase from memory). My CPA said LT Capital Gains for me, since I've owned my over over one year.

Read the above VERY CAREFULLY! This is precisely the problem!

Enjoy your time in JAIL !!!!!!!

[lookingforloot]

I don't disagree with the 16th Amendment at all. The 16th Amendment is completely legal and constitutional. That's because the Federal Income Tax is an INDIRECT excise tax on the electable ACTIVITY OF a "trade or business." This is where most "patriots" go wrong. They think it is a DIRECT tax and therefore unconstitutional. The Supreme Court has acknowledged it as an INDIRECT excise tax over 60 times. Nobody reads. The old adage comes to mind: Those who fail to learn from history are doomed to repeat it.

My copy of the constitution-16th amendment:

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration."

How do you arrive at your explanation regarding what it says?

[Dazzleu]

Can you give us suggestions of names of tax attorney's that have successfully won cases against the IRS or interpret the law the way you do? If so, which ones are the best and in the West? Thanks in advance!

[talion1011]

Can you give us suggestions of names of tax attorney's that have successfully won cases against the IRS or interpret the law the way you do? If so, which ones are the best and in the West? Thanks in advance!

There are no such instances. As have been shown over and over again, Darkstar's interpretation is wrong.

I'm sorry I'm telling you something you don't want to hear or believe, but it is the fact. If you'd like, I can list cases where people DID choose not to pay their taxes based on Darkstar's reasoning, and were determined by the supreme court to owe several millions of dollars in backtaxes and served jail time.

[CoffeeDave]

My Tax person says not tax on the gain. she said no different than a gold bar or do we get a tax deduction when the dollar goes down

[markb57]

There's going to be alot of millionaire prisoners if this thing ever RV's.....

[Den56]

CoffeeDave, I suggest you get a new tax person because . . . . . .

Here's the link to IRS Publication that I was talking about . . .

http://www.irs.gov/pub/irs-pdf/p525.pdf

see Page 33, paragraph 4 which CLEARLY STATES your tax person is WRONG !!!!!!

"Foreign currency transactions. If you have a gain on a personal foreign currency transaction because of changes in exchange rates

, you do not have to include that gain unless it is more than $200. If the gain is more than $200, report it as a capital gain.

[jturner87]

When it R/Vs, you would be well served to discuss these issues with a CPA or tax attorney. There is no statute of limitations for fraudulent returns--you will never sleep soundly again unless you do the right thing. I have had clients audited 20 years after filing a return--it happens.

[katiebug]

I do feel that we have been cooked slowly like that poor LOBSTER.

We should remind these folks more often.

But, will this interpretation of the IRS keep us out of jail. Hope so.

I'm researching it and this gave me some much needed pointers to the codes.

Thanks

[darkstar]

This thread has deteriorated beyond its useful scope.

There are those who see it, and those who don't. There are those who know how to avoid (not evade) a tax liability, and there are those who voluntarily comply. The presentation here is made for those who would like to investigate further.

Den56,

The passages you quote from the IRS publications are 100% accurate. The problem is, you are extending their application to an activity NOT circumscribed within the limited and lawful application of the tax. Don't get me wrong, they prefer people to interpret it precisely as you do. The architects of this scheme are not dumb.

You said/quoted the following:

see Page 33, paragraph 4 which CLEARLY STATES YOU are WRONG !!!!!!

"Foreign currency transactions. If you have a gain on a personal foreign currency transaction because of changes in exchange rates, you do not have to include that gain unless it is more than $200. If the gain is more than $200, report it as a capital gain.

This is a true statement. It is to be understood by the reader that this provision applies to the "gain" IN THE COURSE OF A "TRADE OR BUSINESS." Do you NOT understand this?!!!!

Finally, you said:

Enjoy your time in JAIL !!!!!!!

Sir, it's my prayer for you this Christmas that you are given the wisdom of discernment. You see, I pay the "tribute" (not taxes) in the course of MY "trade or business." For my private affairs, and for the few that know how the system works (most on the Beltway don't by the way), there is nothing to evade, for the only way out of paying is to not be "in the system" to begin with. This is difficult to do if you do not know somebody. I believe this is wrong, and it is why I am telling you the truth. This is what I am trying to show you. Do you not know the truth when it is presented to you? Do you not have eyes to see, or ears to hear? Can you not see the game is rigged and you're the sucker at the table? Does this not anger you?

Don't be angry with me. Be angry at the scheme. I'm simply telling you how IT IS as a matter of fact. Broaden its application if you want to, for that is precisely why it is constructed in the manner in which it is. It's all accomplished with prima facie evidence and a system of guilty until proven innocent. It is not that hard to see. Wake up!

Do you not know who I am?

He who has an ear, let him hear.