Two Recent Incidents Illustrate that the U.S. Treasury Wants to Have it Both Ways With “Legal Tender”

Consider the case of a lad that tried using some $1 US Mint Presidential series proof coins as spending money at a restaurant. And now consider the hung jury in the tax evasion trial of a building contractor that paid his employees in US Eagle one ounce (“$50”) gold coins, at their face value. So if I understand these stories correctly, the U.S. Treasury wants us to accept their “legal tender” coins at face value, when the face value is more than the metal value of a coin, but they’d happily see us thrown in jail when when use a coin at face value if that is less than the actual metal value of a coin. These two news stories help illustrate the supreme hypocrisy of the US monetary and tax systems: the US Mint, the Federal Reserve system (a private banking cartel), the U.S. Treasury Department, and the “self-assessed” personal income tax in the United States.

With the foregoing in mind, my advice to U.S. precious metals investors is straightforward: Keep your transactions as private as possible, while staying within the law. To the best of my knowledge there is no Federal law that requires you or your local coin dealer to report your cash gold or silver purchases, as long as they are less than $10,000. (Although, be advised that if you make multiple sub-$10,000 purchases within a short period, it could be construed as “structuring” (a.k.a. “Smurfing”) to avoid the IRS Form 8300 $10,000 tax reporting trigger.) Pay cash, and don’t offer your name unless required by state or local law. Get a dated receipt as “Cash Buyer” so that you can establish your cost basis for calculating the tax upon eventual resale. Be sure to annotate your receipt with the metal’s spot price at the time and date of your purchase.

Unless you have a penchant for tilting at windmills (not recommended), I suggest that you don’t try any fancy maneuverings when it comes time to sell your metals, or when you barter them for something of like value. Capital Gains taxes will probably be due. Just “Render Unto Caesar”, be done with it, and sleep soundly at night. Yes, I realize that technically, the Treasury is bound by its “legal tender” promises, but that doesn’t stop the IRS from coming after you with a vengeance. And yes, I’ve read the research on the bogus ratification of the Sixteenth Amendment (“The Law That Never Was.”). But just because you are technically right won’t keep them from tossing you in prison. Nearly every tax protestor that has brought up Sixteenth Amendment issues as a defense in income tax cases has failed miserably. Again, don’t ruin your life by jousting with windmills.