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Anonymous Newspaper Commenters Subpoenaed In Tax Case

Soulskill posted more than 5 years ago | from the somebody-point-these-lawyers-at-youtube dept.

Privacy 394

skuzzlebutt writes "In a federal tax case reported in the Las Vegas Review Journal last week, a local businessman has been paying his employees in gold coins instead of cash or ACH, and has reportedly told them that they can only be taxed on the face value of the coinage — not the much higher market value of the metal. The United States disagreed, and brought him up on 57 counts of income tax evasion, tax fraud and criminal conspiracy. The non-authenticated comments section of the original article brought a lot of supporters out of the woodwork, including a few who thought the jury should be hung (literally, procedurally, or figuratively ... pick one). In response, the prosecution has subpoenaed the names of the anonymous commenters, citing fears of jury safety. Or something. The obvious questions of privacy and protected speech aside, for the folks that support the defendant (the newspaper is fighting the subpoena), this also brings back into the spotlight the troll-empowering nature of pseudo-anonymous, non-authenticated boards. If they want to find you, they will; is anonymous commenting still worth it, or is it just too risky for the board owners?"

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i'll be the first to say.. (5, Funny)

Anonymous Coward | more than 5 years ago | (#28360313)

..what a terrible summary

Re:i'll be the first to say.. (5, Insightful)

cml4524 (1520403) | more than 5 years ago | (#28360353)

True, but I don't understand why this is such a big deal. You could never mail anonymous letters threatening people without triggering an investigation, why do people think that when they go online they can threaten people and not suffer consequences?

Re:i'll be the first to say.. (0)

Anonymous Coward | more than 5 years ago | (#28360377)

because words on the internet have no consequence?

Re:i'll be the first to say.. (1)

JustOK (667959) | more than 5 years ago | (#28360381)

cuz it's true?

Re:i'll be the first to say.. (5, Insightful)

GeorgeStone22 (1532191) | more than 5 years ago | (#28360411)

Because they can? I mean seriously, how often does someone actually get called out on abuse over the internet. If I go to someones blogspot and tell them I want to kill them. There will be no action taken. It's not worth the effort and it's an empty threat like 99.99999% of threats on the internet. On the internet your average 120lb nerd can be a 300lb UFC fighting bear wrangler.

Re:i'll be the first to say.. (0)

Anonymous Coward | more than 5 years ago | (#28360689)

When I see anonymous threatening language, I don't typically imagine either a 120lb nerd, nor a 300lb bear wrangler, but usually either a teenage pimpleface, or a juvenile 250lb asshole that each would run, scream, and/or hide in real-life...

Re:i'll be the first to say.. (3, Funny)

Chlorine Trifluoride (1517149) | more than 5 years ago | (#28360709)

As a 300lb UFC fighting bear wrangler, I agree with you.

Re:i'll be the first to say.. (0)

Anonymous Coward | more than 5 years ago | (#28360483)

One may not be able to mail an anonymous letter properly, but one could:

a. Drop the anonymous envelope in the targets' mailbox(es)
b. Place the anonymous envelope under the target windshield
c. Put fake return information on an envelope

etc... Anonymity is the last great refuse against the tyranny of the powerful.

At any rate, people should be able to go online and anonymously threaten people. Part of prosecuting people for a threat rests on the potential validity of said threat. For example, if I said:

I'm going to fucking summon a pink colored meteor from the universe and cause it to crash into the jury deliberations!

...do you believe that it would be a good use of time and money of the law enforcement and legal systems to track me down and prosecute me?

Should one take anonymous, barely specific threats seriously? I do not think so.

Re:i'll be the first to say.. (0)

Anonymous Coward | more than 5 years ago | (#28360563)

Just because they shouldn't be taken (very) seriously, doesn't mean they shouldn't be punishable.

And it's so easy: Don't threaten people with death.

You forgot a few things to be anonymous (5, Informative)

davidwr (791652) | more than 5 years ago | (#28360597)

* Don't touch the envelope or paper without wearing several layers of surgical gloves.
* Don't use a printer that leaves any identifying marks. Most modern color printers are traceable and most older typewriters are as well.
* Don't lick the stamp or envelope!
* Don't drop it in any drop-box that has a security camera anywhere nearby.

Re:i'll be the first to say.. (4, Interesting)

Anonymous Coward | more than 5 years ago | (#28360485)

Apparently they want the identities of all submitters of comments on that article. Not just the ones who made threats (going from the vague to the hyperbole).

It's actually a chilling effect. One day you are commenting on a newspaper article (without making threats), the next day your name and address pop up on some prosecutors desk while he is investigating another commenter on the same article.

Re:i'll be the first to say.. (4, Insightful)

Quothz (683368) | more than 5 years ago | (#28360529)

True, but I don't understand why this is such a big deal. You could never mail anonymous letters threatening people without triggering an investigation, why do people think that when they go online they can threaten people and not suffer consequences?

That was my first thought, as well: The freedom to speak anonymously isn't freedom to make anonymous threats. However, I disagree that anyone was threatening the jury here. There's a huge gap between "they ought to" hurt someone and "I'm going to" hurt someone. If I say that George W. Bush should be tarred, feathered, and ridden out of the country on rails, that's not the same as threatening to assault him.

Snail mail threat == Clear and present danger. (4, Insightful)

TapeCutter (624760) | more than 5 years ago | (#28360549)

Sending someone a snail mail death threat implies you know who they are and where they live. Going to the trouble of a physical cut and paste from magazines implies you are willing to expend time and effort on your threat.

It's the nature of the medium (1)

davidwr (791652) | more than 5 years ago | (#28360571)

You can be on the street-corner talking to your buddies and say "Obama should be shot" and probably not suffer any consequences. Even if a cop overhears you there will probably be a cursory "investigation" but the purpose will probably be to put the fear of God, er, the government in you rather than to actually lock you up.

If you take the time to mail a letter and pay for a stamp, that indicates you are more serious. People who are just blowing off steam don't usually go to the trouble of mailing letters. Some do, but most don't.

Anonymous web comments are somewhere in between, and should be treated as such.

Re:i'll be the first to say.. (1)

morgan_greywolf (835522) | more than 5 years ago | (#28360439)

Agreed. ACH == Automated Clearing House [wikipedia.org] , which is what most people would just call 'direct deposit'. Furthermore, the big ideas should have been at the top of the summary, with the detail about the case down into the paragraphs.

I know this and I've never had one single journalism class, albeit I did take the required writing and composition classes in college.

Anyway, this just goes to show that for those that want true anonymity need to employ something that like that darknet technology in yesterday's articles. (Go find it yourself ;).

Re:i'll be the first to say.. (2, Funny)

jelle (14827) | more than 5 years ago | (#28360761)

"Automated Clearing House".... Everytime I see that, I hear 'You May Already Have Won'...

Did the person who came up with that name think banking was like sweepstakes???

Re:i'll be the first to say.. (4, Informative)

MyLongNickName (822545) | more than 5 years ago | (#28360889)

Clearing houses pre-date Publisher's Clearing House by decades. In fact, my guess is that this is where PCH got the name. Basically clearing houses were places where banks would exchange all of the checks they received from other banks. Accounts would be settled between banks. As a manual process, it was a royal pain in the ass. In the era of electronic funds transfers and check imagining, this process has become much more automated, reducing float times that some individuals would take advantage of.

Re:i'll be the first to say.. (0)

Anonymous Coward | more than 5 years ago | (#28360775)

..what a terrible summary

I think it should be hung.

Thought... (0)

Anonymous Coward | more than 5 years ago | (#28360323)

This means that if my employer pays me in nickels then I also must pay more in income tax to the feds as a nickel is worth more then five cents in pure metal value these days.

Re:Thought... (4, Informative)

juiceboxfan (990017) | more than 5 years ago | (#28360491)

This means that if my employer pays me in nickels then I also must pay more in income tax to the feds as a nickel is worth more then five cents in pure metal value these days.

No, you can go to the bank and get nickles for 5 cents each. You can not go to the bank and get $20 gold pieces for $20 each.

If you were melting down the nickels and selling the bulk metal you would be in violation [usatoday.com] of more than tax laws.

Re:Thought... (1)

morgan_greywolf (835522) | more than 5 years ago | (#28360497)

This means that if my employer pays me in nickels then I also must pay more in income tax to the feds as a nickel is worth more then five cents in pure metal value these days.

All nickels minted after 1964 are made out of a copper-nickel clad (alloy). The metal value of a nickel might be worth more than 5 cents, but I doubt it. Anyway, it doesn't matter since federal states that the value of currency is the face value, period, and that any melting down of coins for metal is willful destruction of government property, which is, at the very least, a misdemeanor.

Re:Thought... (1)

larry bagina (561269) | more than 5 years ago | (#28360541)

You don't hear about it so much today, but a couple years ago, demand (and prices) for copper was up enough that people were stealing copper pipes.

Anyhow, a $20 gold coin has a face value of $20. That's what makes it a $20 gold coin.

Constitution (2, Insightful)

Anonymous Coward | more than 5 years ago | (#28360327)

"No State shall [...] make any Thing but gold and silver Coin a Tender in Payment of Debts [...]"
--Article 1, Section 10 of the United States Constitution

Federal Reserve Notes are nothing but counterfeit money.

Re:Constitution (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#28360397)

Didn't you just shoot up the Holocaust Museum?

Re:Constitution (1)

morgan_greywolf (835522) | more than 5 years ago | (#28360531)

Sorry, it says that no "State shall". Hence, the power is reserved to the federal government,

Re:Constitution (0)

twostix (1277166) | more than 5 years ago | (#28360683)

What power?

It's stating that states must accept gold and silver and only gold and silver as tender. How hard is that to understand?

To hard for some it would seem. Apparently there's got to be secret hidden meanings and interpretation in everything.

Re:Constitution (4, Informative)

Chlorine Trifluoride (1517149) | more than 5 years ago | (#28360741)

"The Congress shall have power ... To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;" --Article 1, Section 8 of the United States Constitution

Re:Constitution (0)

Anonymous Coward | more than 5 years ago | (#28360867)

Uh, I think that string of logic is flawed. Just because something is not explicitly prohibited does not mean it is allowed.

Fucking losers (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#28360333)

Only sad twats write into newspapers anyway.

Re:Fucking losers (1)

Rik Sweeney (471717) | more than 5 years ago | (#28360343)

Only sad twats write into newspapers anyway.

That's slander. I'll see you in court.

Re:Fucking losers (0)

Anonymous Coward | more than 5 years ago | (#28360413)

Only sad twats write into newspapers anyway.

Your mom's twat looks like Osama Bin Laden's beard. She really needs to learn what a razor is...

Re:Fucking losers (0)

Anonymous Coward | more than 5 years ago | (#28360699)

Off topic, but is anyone else seeing the credit line as " by Anonymous Cowardon Wednesday June 17" It still has the space, but CSS is fucking it up. Of course, this is /.

on FF3.0.11/Win7

Yes. (5, Funny)

Anonymous Coward | more than 5 years ago | (#28360335)

Anonymous commenting is no longer worth the effort.

AC OUT!

if it was truly anonymous (1)

mehrotra.akash (1539473) | more than 5 years ago | (#28360349)

how could they be traced in any way??

And so.. (0, Offtopic)

GeorgeStone22 (1532191) | more than 5 years ago | (#28360361)

I TROEL U

It's not worth it... (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#28360369)

Anonymous commenting is never worth it

Cato & Brutus (0)

Anonymous Coward | more than 5 years ago | (#28360379)

So does no one remember Cato and Brutus in American history?

Re:Cato & Brutus (0)

Anonymous Coward | more than 5 years ago | (#28360763)

wasn't cato involved in the OJ trial?

commentors (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#28360383)

I f*ckin' hate anonymous comments. Those ppl are complete cowards.

it's the nature of the web... (0)

Anonymous Coward | more than 5 years ago | (#28360429)

I agree with the prosecution though, all these anonymous cowards should be sentenced to death by hanging....

Threats (4, Insightful)

JPLemme (106723) | more than 5 years ago | (#28360433)

I don't trust the government to protect my rights, but in this case they may have a point. Threatening people with bodily harm is illegal, and freedom of speech is not a valid defense. If you choose to break the law, then you're giving the cops permission to hunt you down and prosecute you, "anonymous" or not. (Even if the law is a bad one and the cops are thugs controlled by a petty dictator.) (Iran, et al.) Which doesn't mean that I think anonymity is bad; I just think that you should learn a little bit about the law and about search warrants and about technology before you start your life of crime. (True anonymity is necessary to defend freedom, even if it means a thousand Cletuses and Bubbas can use it, too.)

Re:Threats (5, Insightful)

sakdoctor (1087155) | more than 5 years ago | (#28360633)

I don't trust the government to protect my rights

Neither do I.
Problem is, many people see governments as the source of rights; so it's an uphill struggle right from the start.

Re:Threats (5, Insightful)

jackb_guppy (204733) | more than 5 years ago | (#28360655)

They do not have point of asking for ALL information of EVERY ONE that posted. This includes Credit Card Numbers, ISP, and Addresses for every poster.

If they tailored request to those few (I read three) that actually crossed the line into threatening, then it is what you say.

I believe it is the over reach that is why ACLU and Review are both fighting for anonymity of their posters.

It is also a pleasure to a media outlet that lives by the 1st Amendment to support their reader 1st Amendment rights. -- Do you hear that NBC, FOX and others that force user give up those rights to respond to articles.

Re:Threats (0)

Anonymous Coward | more than 5 years ago | (#28360815)

Threatening people with bodily harm is illegal, and freedom of speech is not a valid defense.

But what the law fails to take into account is that throwing a message up on a board (esp. anonymously) is MUCH more similar to actually speaking than writing.
Think about it like this: I get mad at someone and say "I cant believe you did that! I could kill you!!!" Yes it's extreme, but unless the person turned up dead I doubt anyone is going to make a legal fuss over it.
However, if you put those words on paper and are dumb enough to actually mail it, you bet there will be an investigation.

The difference here is spontaneity.
Writing a letter and mailing it is premeditated.
Reading something online, getting mad, clicking in a text box, typing a rant, and clicking "post" all in a few seconds is not.


ps. Im a long time /. member.... I'm posting this AC just for the irony.

Re:Threats (1)

Tanktalus (794810) | more than 5 years ago | (#28360947)

(Even if the law is a bad one and the cops are thugs controlled by a petty dictator.) (Iran, et al.)

Right up to that "Iran" bit, I thought you were talking about North America, and referring to union bosses.

anonymity is a right (4, Insightful)

spyrochaete (707033) | more than 5 years ago | (#28360443)

I believe that in the (implied, non-existant) Internet charter of rights anonymity is a basic human right. I believe in opt-in, not opt-out. A webmaster has a sacred trust that he will guard his users' IP addresses and only leverage them for internal use, if at all. Besides, that IP address could have been used by the subscriber, a child, a wardriver, a cheapskate nextdoor neighbour, or an entirely different household if the ISP made a mistake in their logs.

On my blog I allow anonymous comments and I wrote "(optional)" next to the email and WWW fields on the comment submit form. I get TONS more spam because of this, but that's a service I feel is essential to my readers and integral to the fabric of the web.

If the government fears how people react to facts then maybe they should outlaw news media.

Re:anonymity is a right (0)

Anonymous Coward | more than 5 years ago | (#28360551)

Your user name is a perfect reflection of your cognitive abilities. These people are threatening a *jury*. That's not a threat to the government - it's a threat to the sovereignty of law.

Let's use your logic, but the other way - if the government is afraid for the safety of juries, maybe they should just eliminate jury trials and have all trials be by judge.

Who were these authors? (2, Interesting)

sycodon (149926) | more than 5 years ago | (#28360555)

And should they have been prosecuted? They formented a war ya know.

Publius, Pacificus, Cattalus, Horatius and Philo Camillus, Silence Dogood, Alice Addertongue, Fanny Mournful, Obadiah Plainman, Busy Body, Populus, An American, A Son of Liberty ,"Vindex the Avenger".

Re:Who were these authors? (1)

TapeCutter (624760) | more than 5 years ago | (#28360731)

"And should they have been prosecuted? They formented a war ya know."

Good question. After the bushfires here in Australia there was an opinion columnist in the Sydney Morning Hearald calling for greens to be hung from lamposts [abc.net.au] and even went so far as to use the Green parties emblem. Even though she clearly broke our sedition laws I don't think the hatefull bitch should be prosecuted but I do think the SMH and the mass-media in general should disown her and her kind [cfsmtb.net] (NSFW).

Basic human right??????? (1, Troll)

Shivetya (243324) | more than 5 years ago | (#28360583)

W T F ????

So the ability to make threats or derogatory comments without having to take responsibility is a basic human right?

When does responsibility for ones actions apply? Or is it a basic human right not be responsible for what one does or says? Or is that only when the subject agreed upon is mutually acceptable for ostracism?

Re:Basic human right??????? (0)

Anonymous Coward | more than 5 years ago | (#28360631)

Don't you have the KKK in the US? What is different?

How the judge SHOULD rule (2, Interesting)

davidwr (791652) | more than 5 years ago | (#28360459)

The judge should look at each comment individually as well as holistically against other comments apparently by the same commenter.

If the comments appear to be a credible and actual threat against a juror, as opposed to someone blowing off steam, making non-credible threats, or just blowing off steam, then it's worth a closer look.

To determine if unauthenticated comments apparently made by the same commenter are made by the same commenter I would order the newspaper to provide a statement saying the comments are very likely from the same computer, very unlikely from the same computer, or there is no way to tell. If the post looks like it's from the same person, and the computer is the same, the court can assume it's the same until someone claims otherwise.

Now once I have a list of comments that are credible threats, then it's time to go further:
I would give a special master subpoena power for the IP and login-time information for those posts and subpoena power to the ISPs for the approximate street address of the customer. The court would use this to determine if the seemingly credible threats really were credible. If a threat said "I'm going to walk into your office and shoot you" but the threat came from a town 3 states away, that's likely not credible. Once I've gotten down to the credible threats, then and only I would allow the person's name and address to be subpoenaed. I would also look very favorably on anyone who, upon being contacted by the court or the police, claimed they were joking or blowing off steam. After all, out of every random group of people making credible-sounding threats like these, by far most are harmless.

Why make it traceable? (4, Interesting)

DoofusOfDeath (636671) | more than 5 years ago | (#28360463)

Does anyone know why forum administrators even bother keeping around enough information to reveal the identity of an anonymous poster?

I mean, I can see keeping around the web server logs for a day or two, to help debug problems. And if you do analytics, keeping the logs around long enough for the analytics software to compute aggregate data.

But why keep any data longer than that; especially data that's detailed enough to tie an IP# to a posted message?

Re:Why make it traceable? (3, Insightful)

Darkness404 (1287218) | more than 5 years ago | (#28360557)

...Because most forum admins know next to nothing about computers other than "type this and it sets up a bulletin board!!!"?

Re:Why make it traceable? (0)

Anonymous Coward | more than 5 years ago | (#28360661)

Because it's the dafault setting to keep the logs. Setting up guidelines and a system to delete stuff costs time and offers no monetary benefit. There is no incentive to delete anything.

Re:Why make it traceable? (0)

Anonymous Coward | more than 5 years ago | (#28360715)

There are analytics and there are intrusion detection reasons for keeping the logs. Having said that, I run daily backups. I do not actively try to avoid backing up that data. I may, for example, need to test a different algorithm against my collected data in the future. The historical records will help me do that. I do not have an enough information to identify someone immediately. With some work, however, you can start correlating infromation and make some reasonable guesses. I am not sure they could hold up in a court of law, however.

Example:
I trace to a particular computer in a house. That house is the primary residence for a family of four, consisting of a mother, father, and two teenage offspring (minors). The computer runs Windows and has no password. Did a parent post the comments or one of the teenagers? Beyond being different applications of the law because of the minors, that is solidly reasonable doubt. It also does not remove the fact that it may have been done by a friend who was at that house, either.

Re:Why make it traceable? (1)

iceperson (582205) | more than 5 years ago | (#28360951)

Most forum admins record the IP of posters to ban spammers and/or abusive posters.

Face Value vs Ore Value (5, Interesting)

Rockoon (1252108) | more than 5 years ago | (#28360469)

So on the one hand we take Gold Coins and use the Ore Value, while on the other we take Quarters and use the Face Value.

So lets say I take my pay check and head off to the bank and when cashing it, get a roll of pennies. Further suppose that one these pennies has some rare quality making it worth $100 to a collector... is that an extra $100 of Income?

Re:Face Value vs Ore Value (5, Insightful)

leonardluen (211265) | more than 5 years ago | (#28360537)

If you sold it to the collector for $100 it indeed would be an additional $99.99 income.

Re:Face Value vs Ore Value (4, Interesting)

Rockoon (1252108) | more than 5 years ago | (#28360629)

Certainly in the scenerio where I actualy sell, the onus is on me to report income.

If I don't sell, however... its just face value, right?

In this story they go after the employer, regardless of the actions of the employees.

This is a very complicated subject that begs a lot of questions. Can my bank post a $100 loss for their mistake in giving me a $100 penny? Can they post a $100 win if they hand me a counterfeit $100?

Re:Face Value vs Ore Value (5, Interesting)

twostix (1277166) | more than 5 years ago | (#28360871)

What they're terrified of is people going back to hard currency.

He's being made an example of, it's that simple.

It's a loophole that's protected by the US constitution. Gold and Silver are protected as legal currency and the federal government must supply and accept gold and silver tender. The only way around it is to amend the constitution - or scare people enough not to do it.

If it became popular may also get people asking difficult questions like why a $30 coin is really worth $1000, or more to the point why a $1 federal reserve note can only buy 1% of the value of a $30 dollar coin.

Such things are best not thought about by the plebs.

Re:Face Value vs Ore Value (1)

the_other_chewey (1119125) | more than 5 years ago | (#28360553)

So lets say I take my pay check and head off to the bank and when cashing it, get a roll of pennies. Further suppose
that one these pennies has some rare quality making it worth $100 to a collector... is that an extra $100 of Income?

If you go on and sell it for that price, it very probably is, yes.

Re:Face Value vs Ore Value (1)

algerath (955721) | more than 5 years ago | (#28360635)

if you sell it for $100 yes, you should pay taxes on $100

I think your argument would only work if the people getting paid were actually spending the gold coins at face value, which would be incredibly stupid.

It is really no different than if the boss pays you in merchandise which you then sell, you can't then claim he never paid you with money so you owe no taxes, well I guess you can claim that but it won't work

YES! (2, Funny)

gEvil (beta) (945888) | more than 5 years ago | (#28360473)

...is anonymous commenting still worth it, or is it just too risky for the board owners?

Absolutely!

Posting AC so they don't find out who I am.

Re:YES! (0)

Anonymous Coward | more than 5 years ago | (#28360753)

Fail

Re:YES! (0)

Anonymous Coward | more than 5 years ago | (#28360891)

*whoosh*

the fine print... (0)

Anonymous Coward | more than 5 years ago | (#28360509)

The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.

Hypocritical? (1)

asdfndsagse (1528701) | more than 5 years ago | (#28360517)

So now if I pay a debt to a store in quarters I only have to pay sales tax on 13% of the face value as the quarter melt value is only 3.25c?

http://www.coinflation.com/coins/1965-2007-Washington-Quarter-Value.html [coinflation.com]

Re:Hypocritical? (1)

Chlorine Trifluoride (1517149) | more than 5 years ago | (#28360767)

Quarters, unlike gold coins, are legal tender.

Face value (4, Insightful)

kimvette (919543) | more than 5 years ago | (#28360523)

Further, the $50 gold coins and the silver dollars Kahre used for payroll are designated by Congress as legal tender, so people are entitled to value them at their stamped denominations, he also contends. Taken at face value, each defendant's annual coin income placed him below the threshold for filing a federal tax return.

Both the IRS and Kahre are in the wrong here.

The Government is required by LAW to recognize American currency at face value. They have no choice in the matter. The government's isregarding face value of "legal tender for all debts, public and private" is illegal. The government issued that currency (or authorised its issuance) for the face value and require it to be accepted as such so they have no legal choice but to accept it for the value they declared it to be.

However, if he wants to play the "face value" defense, which is legitimate (he should win that case) what he should be charged with is violating the federal minimum wage laws, not tax evasion.

What he and his employees engage in is tax avoidance, which is perfectly legal. Tax avoidance is simply following the letter of the law and avoiding the incurring tax liability. Practically every politician engages in avoidance. Things such as claiming one's standard exemption, creating a shell company and having it lease one's vehicle for business purposes, and so forth. If I ever make the kind of money where it makes sense to do so, you bet your ass I would hire a tax lawyer and take advantage of the law to the my benefit. The tax code is needlessly complex for three things: to keep lawyers busy and make them rich, for social engineering (keep citizens in line by making them accept government control), and to benefit politicians who create hard-to-understand loopholes for their own use.

Re:Face value (2, Insightful)

kimvette (919543) | more than 5 years ago | (#28360539)

"It's not whether what Mr. Kahre did was legal under the law," defense attorney Michael Kennedy told the jury in his opening statement. "It's whether he believed what he did was legal," in the absence of explicit instructions by the IRS -- on its Web site, in its publications or in response to written correspondence from Kahre -- on how to value post-1985 gold or silver coins.

Rephrased, what Kennedy is saying is this: "It's not whether it's legal or not, it's whether we want to fuck the taxpayer or not."

IRS is right on this one (5, Interesting)

davidwr (791652) | more than 5 years ago | (#28360677)

What this guy did was essentially barter gold bullion that happened to be in coin form for labor.

Even if the US government is required to trade a $20 bill for your $20 gold piece, that does not establish the value of the gold piece for tax purposes.

Even a $20 bill can be worth more than $20 if it's a collector's item, such as one that's in an uncut block, one that's old and still in original condition, one that's very old, or one that's been autographed by hand by the Treasurer of the United States or Secretary of the Treasury whose signature appears on the bill.

If I pay my employees in collector-value currency, you bet the IRS will consider it a barter-for-labor arrangement and tax accordingly.

Re:IRS is right on this one (1)

Fallingcow (213461) | more than 5 years ago | (#28360851)

Even if the US government is required to trade a $20 bill for your $20 gold piece, that does not establish the value of the gold piece for tax purposes.

As mentioned by a poster somewhere upthread, it would make more sense to tax the actual value of the coin when and if the employee sells it as bullion.

In the mean time, as the GP suggested, the guy may be (probably is) in violation of minimum wage laws (unless he wants to say he's bartering with the coins as gold rather than at their face value, in which case the gold value should be taxed--either way, he's probably breaking the law, but different laws)

Re:Face value (2, Interesting)

Greger47 (516305) | more than 5 years ago | (#28360693)

The Government is required by LAW to recognize American currency at face value. They have no choice in the matter. The government's isregarding face value of "legal tender for all debts, public and private" is illegal. The government issued that currency (or authorised its issuance) for the face value and require it to be accepted as such so they have no legal choice but to accept it for the value they declared it to be.

If I pay someone with a $20 bill and a lump of gold and then try to make the case that the employee only made $20, the IRS would come down on me like a ton of bricks and I would be laughed out of court.

In this case the goverment was stupid enough to stamp a $20 sign on a lump of gold, but that still doesn't change the fact that the employee receives a lot more wealth from me than $20 when taking the coin.

Re:Face value (0)

Anonymous Coward | more than 5 years ago | (#28360839)

In this case the goverment was stupid enough to stamp a $20 sign on a lump of gold, but that still doesn't change the fact that the employee receives a lot more wealth from me than $20 when taking the coin.

Actually it does. When it's authorized as legal tender, it has either face value, or raw material value. In this case, the raw material is more valuable than face value.

There would be no difference if paper became as rare and valuable as gold and the feds started printing money on cloth. Paper money would then have the legal tender value authorized by the government, and the inflated raw material value.

Re:Face value (0)

Anonymous Coward | more than 5 years ago | (#28360877)

Funny, because a piece of paper stamped with a 20 is worth something, but without is worth little or nothing. Why is monetary value derived from the little stamped in some cases and not in others? Because it's convenient for the government at the time? No, this guy just found a loophole in the law and took advantage of it.

Do you know how many people have "company" cars and get their company to pay for their gas, cell phone, and internet? Yeah, pretty much every business man.

The sooner you accept that the tax code is broken and fully exploited the sooner you will realize how much you've been fucked over in the past.

Re:Face value (1)

elrous0 (869638) | more than 5 years ago | (#28360759)

That would be true if we were all a bunch of mindless zombies and the law was a completely clear and undebatable codex that needed no real-world interpretation. In the REAL world common sense can, does, and should play a role in the law and its interpretation. This sort of "letter of the law" mentality is what leads to stupid shit like kids getting expelled from school for bringing plastic knives in with their lunch (because TECHNICALLY they did indeed "bring a knife to school"). What it comes down to this case isn't "Was he technically following the exact letter of the law?" It comes down to "Would a jury of reasonable peers conclude that this man was willfully engaging in tax evasion?" And I think it's clear that the answer to the latter question is, in the mind of anything resembling a reasonable human being, a resounding "Yes."

wrong (1)

Reality Master 201 (578873) | more than 5 years ago | (#28360809)

American workers are taxed on the dollar value of their earnings - this is typically payment in cash, but if you receive non-monetary compensation as part of your employment, you're still responsible for paying taxes on the dollar value of that compensation. The value of the gold coinage was far higher than the currency face value - which was the whole point of giving it instead of normal greenbacks or a check.

Re:Face value (1)

Maximum Prophet (716608) | more than 5 years ago | (#28360845)

The Government is required by LAW to recognize American currency at face value.

Only paper money is "legal tender for all debts, public and private".

Coinage is different, under a different set of laws.

They can't have it both ways! (0)

Anonymous Coward | more than 5 years ago | (#28360561)

If the US government is going to tax based on the value of the material the money is made from my taxes will be MUCH lower this year as paper is more or less worthless.

Re:They can't have it both ways! (0)

Anonymous Coward | more than 5 years ago | (#28360847)

It's the government. They can have it any way they want. Especially tax agencies always twist things the way they get most. It doesn't have to be reasonable or fair. It just hast to generate more taxes.

Unlawful governance (3, Insightful)

twostix (1277166) | more than 5 years ago | (#28360573)

"Reportedly told them that they can only be taxed on the face value of the coinage -- not the much higher market value of the metal"

The money paid is 100% legal United States Currency, minted by the United States Government itself.

The US constitution specifically states that gold an silver are legal tender.

What's the problem? It's not his problem that the US government has destroyed the value of money so that "old" but perfectly legal currency is now worth 1000 times more than it's equivalent "new" money...IF the government doesn't like it they need to change the law and outlaw the gold coins that they mint as legal tender.

Otherwise he's being prosecuted for something that "feels" illegal, which is a deadly slippery slope to go down.

Re:Unlawful governance (1)

Chlorine Trifluoride (1517149) | more than 5 years ago | (#28360783)

The US constitution specifically states that gold an silver are legal tender.

[citation needed]

Re:Unlawful governance (4, Insightful)

brusk (135896) | more than 5 years ago | (#28360859)

No, he's clearly paying his employees based on the market value of the coins, not the face value.

Imagine I paid my employees with one dollar bills signed by Jesus, Buddha, and Abe Lincoln. Clearly these would fetch a high price on the autograph market, significantly above $1 (yeah, I know, you're not supposed to mutilate currency). I think the IRS would be perfectly justified in treating these as having a worth above their face value, since any reasonable person would recognize that they are not just an ordinary dollar bill.

He's being prosecuted not for paying his employees in gold, which is perfectly fine (if dumb), but for lying about its value, which is against the law.

RTFA first (2, Insightful)

freedom_india (780002) | more than 5 years ago | (#28360939)

The money is printed by the Federal Reserve and NOT by the Federal Government. Sheesh, don't you know the difference?
It is legal tender for all debts.
The IRS is NOT prosecuting him for paying in Gold. The IRS doesn't care how you pay someone. Gold, Silver, mud, iron, hell in Nevada even Sex.
What it cares about is its value in USD.
In this case this guy paid in Gold, whose real value is more than what its face value states.
RTFA and research before you open your pie hole.

The tax dodge itself seems spurious (5, Interesting)

91degrees (207121) | more than 5 years ago | (#28360579)

So, they can avoid income tax on 99% of their income by being paid in $1000 worth of coins with a total face value of $10. That makes sense.

Surely then, should they choose to sell these they'll pay income tax on any profit they make. If they use them as legal tender, they'll only be able to use the face value. I suppose they might be able to haggle the price of a large purchase down a little but for everyday spending it seems the savings are small.

Re:The tax dodge itself seems spurious (2, Interesting)

Faerunner (1077423) | more than 5 years ago | (#28360819)

I'm not even sure most places will accept gold coins as legal tender; not that they're not legal, but the cashiers and managers have rarely seen one and will become suspicious if someone tries to pay for their loaf of bread with a couple of Sacajawea dollars, let alone higher denomination coins. (I know; I've tried.) I imagine having an entire company's worth of employees come into your store and attempt to buy snacks with $20 gold coins would be enough to warrant a call to the authorities by a nervous manager.

That being the case it would stand to reason that the person would attempt to sell the coins or trade them for paper dollars at the bank. It does not stand to reason that having been told they don't need to pay income tax on the coins, they would file their taxes that year and tell the IRS about any extra money they made off the transfer, at least assuming they're smart enough to figure out why the IRS doesn't need to know.

Re:The tax dodge itself seems spurious (0)

Anonymous Coward | more than 5 years ago | (#28360943)

You are correct. If paying them $10 in face value was legal (and it's a tax dodge, so it's not), then as soon as they traded the gold in, there would be a $990 *Short Term Capital Gain* which is all taxable, and has to be reported.

How anonymous is slashdot? (3, Interesting)

mdmkolbe (944892) | more than 5 years ago | (#28360595)

If the logs aren't there, the subpoena doesn't hurt anything. So I ask what sort of logs does slashdot keep that could conceivably be used to track down an AC? Be imaginative in your answers (e.g. someone could try matching the HTTP access logs against the time the comment was posted(*)). Think like a smart technical cop who really wants to figure this out.

(*) There are probably too many accesses in a single minute to determine that reliably, but it may give you a candidate list that you could then correlate with other data. Like I said, be imaginative.

Re:How anonymous is slashdot? (1)

scottv67 (731709) | more than 5 years ago | (#28360879)

>If the logs aren't there, the subpoena doesn't hurt anything. So I ask what sort of logs does slashdot keep that could conceivably be used to track down an AC? Be imaginative in your answers (e.g. someone could try matching the HTTP access logs against the time the comment was posted(*)). Think like a smart technical cop who really wants to figure this out.

Why even make it that complex? Who's to say that there isn't a field in database row 28360595 that contains the IP address of the system used to post that message? Every post by an AC could have the source IP recorded in case LEOs come knock-knock-knockin on the /. door. (Cue the "But I am using TOR/a web proxy/botnet to hide my identity" or "I am behind a firewall that uses NAT so you'll never catch me!11!1111!!!" replies)

The american tax system (0)

Anonymous Coward | more than 5 years ago | (#28360611)

For a European this all seems pretty strange. Are you, as a citizen in the USA, responsible for paying the income tax yourself?

If you earn $2000/mo, do you actually receive $2000/mo in your hand or via some payslip/cheque system?

Does this mean you can choose to keep it all if you feel like breaking the law?

Re:The american tax system (1)

ponraul (1233704) | more than 5 years ago | (#28360791)

Generally, no.

If you're working a regular job, your employer withholds money from your gross earnings to make scheduled income tax payments on your behalf. Usually, if you don't have any investment income and depending on how much you have withheld, you might get a tax refund instead of owing the IRS. Most people fall into this category.

If you elsewmake your money from investments or other kinds of alternate employment, that's when you start owing tax. Most people who fall in to this category are rich.

Re:The american tax system (1)

Zebai (979227) | more than 5 years ago | (#28360811)

There are laws designed to encourage you and your employer to have witholdings from your paycheck but for the most part yes you can avoid such things and face the news in April.

Kahreâ(TM)s Prosecutors Are Going Nutso (0)

Anonymous Coward | more than 5 years ago | (#28360621)

More useful information about what is really going on here:

http://www.fff.org/blog/jghblog2009-06-12.asp

Free Speech (0)

Anonymous Coward | more than 5 years ago | (#28360665)

Free speech means the freedom to say _anything_.

While I may not agree with some troll suggesting death, hatred, or the holocaust didn't happen, doesn't mean he shouldn't have the right to anonymous free speech.

The anonymous part is very essential. With the boondoggle of an election in Iran, the Tiananmen Square anniversary, etc. the need for anonymous free speech is essential. The Military Industrial Complex fears the pen more than the sword.

Wrong! (1)

Hurricane78 (562437) | more than 5 years ago | (#28360835)

If they want to find you, they will;

Try that with someone posting trough an anonymizing non-logging proxy that self-destroys as soon as its surrounding force fields change even a bit. :P
(Ok, in reality someone switching it off, removing/addingg hardware or logging in (honeypot anyway), is enough. But even my little linux server here can do this.)

A classic case of lack of imagination. ;)

Anonymous Newspaper Commenters Subpoenaed in (0)

Anonymous Coward | more than 5 years ago | (#28360841)

...Jury Death-Threat case. There, fixed it for you.

FuUck!? (-1, Redundant)

Anonymous Coward | more than 5 years ago | (#28360917)

Niigers everywhere a previously this p0st up. they are Come

Stupid question (1)

shrubya (570356) | more than 5 years ago | (#28360935)

Sheesh. Why a whole article? This is not a difficult question.

Anonymous comments are a great choice for speech that is legal, but might expose a public speaker to social consequences: reviews, dark humor, political criticism, whistleblowing, etc.

Anonymous comments should not be a shield for speech that is an illegal attack on others: libel, threats, intimidation, etc. If you want to say that kind of stuff, be prepared to own up to it.

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