- IRS Suffers Staggering Defeat
- Tax Questions Raised Regarding Gold and Silver Coins
Used to Pay Wages
- Around noon on Monday, September 17th, a Las Vegas federal
jury returned its verdict refusing to convict nine defendants of any of
the 161 federal tax crimes they had been charged with. The charges included
income tax evasion, willful failure to file and conspiracy to evade taxes.
- The four-month trial centered around the family businesses
of Robert Kahre who paid numerous workers for their labor with circulating
gold and silver U.S. coins, and did not report the wages. The payments
took place over several years, allegedly totaling at least $114 million
- On September 20, 2007, three days after the federal trial's
dramatic conclusion, the Las Vegas Review Journal, reportedly under a degree
of public pressure, ran its first (and last) story about the outcome of
the trial. To this day, with exception of the single article by the Review
Journal, no major media entity has published a news story regarding the
outcome of this important federal criminal tax case.
- The censorship of this important news story is, unfortunately,
not unexpected given the continuing, worldwide onslaught against the U.S.
"dollar" -- specifically the Federal Reserve variety, and the
ever growing numbers of Federal Reserve Notes required to trade for an
actual ounce of silver, gold, oil, or for that matter, anything.
- In short, this failed prosecution has coalesced and exposed
truths our Government desperately needs to hide from the People: the truth
about our money, the truth about our (privately-owned) central bank, and
the truth about the fraudulent nature of the operation and enforcement
of the federal income tax system.
- According to defense attorney Joel Hansen, who represented
co-defendant Alex Loglia, the primary "willfulness" defense was
that the defendants believed they had no legal obligation to withhold,
pay income taxes or report anything to the government because, in part,
the nominal (i.e., face value) of the gold and silver coins is so small
as to fall beneath the reporting thresholds set by the Internal Revenue
- The Defendants also argued that regardless of the valuation
of the coins for internal revenue purposes, there is no law that requires
average American workers to file or pay direct, un-apportioned taxes on
the fruits of their labor.
- The Government argued that the payments in solid gold
and silver U.S. coins must be considered at their bullion (i.e., intrinsic
full-market) value when considering the worth of the wages for purposes
of the internal revenue code.
- Attorney Hansen cited two Supreme Court cases bolstering
Defendant's monetary argument at the heart of the defendants "willfulness"
- The essence of the argument is that under the Constitution
Congress is obligated by law to mint and circulate such coins as demand
requires, and must establish the value of coins as they are used as legal
tender, but the coins' market value, arising as valuable personal "property,"
is a distinct, separate attribute of such coins, and is of no legal consequence
if the coins are used as legal tender.
- In other words, if a worker is paid with such coins,
his taxable "income" (if any) can only be the face value indicated
upon the coin money paid -- i.e., $1.00 for a circulating silver dollar
or $50 for a circulating gold U.S. coin. Not surprisingly, the IRS has
never issued any public guidance regarding this significant issue. The
first case, Ling Su Fan v. U.S., 218 US 302 (1910) establishes the legal
distinction of a coin bearing the "impress" of the sovereign:
- "These limitations are due to the fact that public
law gives to such coinage a value which does not attach as a mere consequence
of intrinsic value. Their quality as a legal tender is an attribute of
law aside from their bullion value. They bear, therefore, the impress of
sovereign power which fixes value and authorizes their use in exchange."
- The second case, Thompson v. Butler, 95 US 694 (1877),
establishes that the law makes no legal distinction between the values
of coin and paper money used as legal tender:
- "A coin dollar is worth no more for the purposes
of tender in payment of an ordinary debt than a note dollar. The law has
not made the note a standard of value any more than coin. It is true that
in the market, as an article of merchandise, one is of greater value than
the other; but as money, that is to say, as a medium of exchange, the law
knows no difference between them."
- Defense attorney Hansen confirmed that members of the
jury were able to actually hold and inspect the gold and silver U.S. coins
paid to the workers.
- After almost four months of testimony and three and a
half days of deliberation, the jury did not convict any of the defendants
of any of the 161 crimes alleged. Although some defendants were acquitted
of multiple counts, and several were acquitted completely, others may have
to stand for a retrial if the Government brings charges a second time.
- The Review Journal reported the jury foreman claimed
DOJ prosecutors admitted they were "shocked" by the outcome.
- In March 2007, the primary defendant, Bob Kahre, filed
a federal civil rights lawsuit against the prosecutor and IRS agents who
had conducted what he alleges to be an unlawful search and seizure raid.
In 2005, the Ninth Circuit Court of Appeals refused to overturn a previous
District Court ruling holding that the federal prosecutor is not entitled
to absolute immunity for the unlawful raid. Read more.
- Execute a Google News search to attempt to locate recent
news stories about the Kahre tax trial.
- The media suppression of this story is similar to the
widespread mainstream media suppression of the July 11, 2007 acquittal
of Louisiana attorney Tommy Cryer who was also charged with multiple federal
income tax crimes and relied upon numerous Supreme Court precedents and
U.S. tax laws to establish his "willfulness" defense. Click here
for a previous WTP update containing a link to Cryer's 100-page Motion
to Dismiss which details his legal arguments.
- Execute a Google News archive search to attempt to locate
news stories about Tommy Cryer's tax trial.