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Thread: How can legal tender be illegal?

  1. #1

    Default How can legal tender be illegal?

    Interesting little concept, maybe I should be paid in gold coins. I hate paying taxes anyway.

    "For instance, if a worker was annually paid in gold coins with a legal tender face value of $2,000, the market value of the gold content in those coins could be $40,000, but only the legal tender face value of $2,000 would theoretically count as taxable income. That face value of $2,000 is low enough to be non-reportable to the IRS."

    Subject: How can legal tender be illegal?

    Robert Kahre is facing up to 296 years in prison. His crime? He hired workers on mutually-agreed terms, and paid them in gold and silver dollars rather than in Federal Reserve dollars.

    First, some background . . .

    * The face value of the U.S. Mint's gold and silver coins are legal tender, meaning they must be accepted in payment of debt
    * But a Gold Eagle coin that has "$50" printed on it is legal tender only up to $50, while its gold content is worth about $1,000 in Federal Reserve notes
    * No law or IRS regulation requires that receivers of Gold Eagles and other U.S. Mint coins must report the market value of the coins instead of the legal tender value

    After extensively researching the issue, Kahre . . .

    * hired workers as independent contractors, so he would not pay the payroll tax for their labor
    * paid them in gold and silver coins, whose face value - that is, legal tender value - was so low that the workers legally didn't have to report it as income to the IRS

    For instance, if a worker was annually paid in gold coins with a legal tender face value of $2,000, the market value of the gold content in those coins could be $40,000, but only the legal tender face value of $2,000 would theoretically count as taxable income. That face value of $2,000 is low enough to be non-reportable to the IRS. But . . .

    Even though the coins Kahre used were legal tender, the Justice Department alleged that Kahre's system was a fraudulent, tax-evading scam.

    We agree with Jacob Hornberger who asserts that the federal government's prosecution of Kahre is self-contradictory . . .

    * if you owe $100 in taxes and pay with gold coins with face values totalling $100, the IRS will accept the payment as $100; it could then sell the coins on the market for twenty times that amount and keep the difference. The government will accept your payment as "legal tender."
    * but if YOU receive gold coins from someone else in a private transaction, the IRS says you must report the market value of the coins, not the face value. That is, YOU CANNOT TREAT THE COINS AS LEGAL TENDER.

    The government fears that if more people took the law at its word and behaved like Kahre . . .

    * people would demand payment in the Mint's gold and silver coins and have far fewer reportable "dollars" in income, meaning fewer people would pay income taxes
    * the market would soon prefer the coins produced by the Treasury Department's Mint that are regulated by law - not the inflated dollars created by order of the independent Federal Reserve Board
    * good money (gold and silver) would drive out the bad (paper Federal Reserve Notes and electronic keyboard strokes), whereas the federal government needs inflated, deficit-driven money to pay for its endless wars, failed welfare schemes, and expanding police state

    No wonder the government views Kahre as a threat, and is willing to made a mockery of its own legal tender laws to destroy him!, however, believes Kahre was on to something. That's why we endorse the "Honest Money Act," which would repeal the legal tender law that gives the Federal Reserve a monopoly over the money supply. This bill, along with the "Tax-Free Gold Act" and the "Free Competition in Currency Act," is a plank in our End the Inflation Tax Campaign.

    Repealing the legal tender law would foster the creation of HONEST free market money, and protect people from the Federal Reserve's endless onslaught of legalized counterfeiting, which constantly reduces the value of your money.

    Tell Congress to pass the bills in our End the Inflation Tax Campaign.

    Use your personal comments to mention the hypocrisy involved in the Kahre case. If the feds are going to make it a crime to FOLLOW the legal tender law, then that's just one more argument for repealing it. You can send your message here.

    Thank you for being a DC Downsizer.

    James Wilson
    Assistant to the President

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  3. #2


    We need not to let this case slip below our radar. When they did this crime, they didn't think of this. They thought of people spending old coins for face value, and said 'their loss'. But they didn't think of someone screwing them out of taxes this way. They only thought of them screwing us out of taxes (alternative minimum tax, anyone?). This guy is a hero in my book.

    Make Americans Cucks Again!

  4. #3


    Acptulsa---A hero to me as well. I'm even considering doing it, not sure how I would do it.

    I hope Downsize keeps up with this case.

  5. #4


    Kahre’s Conviction Is a Sad Day for America
    by Jacob G. Hornberger

    Last week, Las Vegas businessman Robert Kahre, the man who paid his workers in gold coins and silver coins, was convicted on all 57 counts of tax evasion. Forty-eight years old, he now faces the rest of his life in prison. His girlfriend and mother of his four children was also convicted. Sentencing will be in November.

    There is something seriously wrong with a society that is convicting and jailing people like Robert Kahre, Michael Milkin, Martha Stewart, and Joseph Nacchio. As the Russian people have experienced so well, this is what a socialist and interventionist society ultimately ends up doing — punishing ordinary business people for violating economic crimes and tax crimes, crimes that would be nonexistent in a genuine free-market society.

    If Kahre had been living sometime between 1787 and the early part of the 20th century, he wouldn’t have been convicted of income-tax evasion. The reason? Our American ancestors understood that an income tax and an IRS were antithetical to a free society. That’s why the United States was income-tax free for more than a century.

    Then the progressive income tax came to America, along with all the socialist and interventionist schemes it funds and the myriad of economic crimes and tax crimes by which government officials are able to keep businessmen in line.

    But it’s not just the IRS that was upset with Kahre. Lurking behind his prosecution is another federal agency, one that is just as powerful and destructive, if not more so, than the IRS — the Federal Reserve.

    Suppose a person owes one hundred dollars in income taxes to the IRS. Let’s say he has inherited 5 gold coins issued by the U.S. mint, each one having a face value of $20. Let’s assume that each gold coin weighs one ounce and that the person is able to sell the coin in the marketplace for one thousand paper dollars. That means that the person’s 5 gold coins have a value of 5 thousand paper dollars.

    Let’s assume that the person sends in his five $20 gold coins to the IRS, in payment of his one-hundred dollar tax bill. Will the IRS issue him a refund, representing the difference between the fair market value of the coins and the amount of the tax owed, i.e., 4,900 dollar bills?

    Absolutely not. The IRS will say that the coins are legal tender at face value. They will keep the coins, sell them, and pocket the difference.

    But as Kahre has demonstrated, the government’s representation that the gold coins are legal tender is false and fraudulent.

    Kahre and his workers struck a deal in which he agreed to pay his workers, say, 5 gold coins. That meant that their income was one hundred dollars. But the IRS and the federal prosecutors cried, “No! For purposes of the IRS, the workers are required to report the free-market value of the coins, not their face value.”

    In other words, those gold coins and silver coins are not legal tender after all. It’s all just a charade, one that Kahre had the audacity to expose.

    Why is a $20 gold coin worth one thousand paper dollars instead of twenty paper dollars?

    That’s where the Federal Reserve comes into the picture.

    At one time, prior to the creation of the Federal Reserve, a $20 gold coin did trade for 20 paper dollars. In fact, the real money was the gold coin and the twenty-dollar bill was nothing more than a promise to pay the gold coin.

    Then the U.S. government called into existence the Federal Reserve System, nationalized and confiscated people’s gold, and decreed a paper-money standard. Over the decades, it printed gobs and gobs of paper money to fund its ever-increasing welfare-warfare programs.

    Thus, the reason that a twenty-dollar gold coin today exchanges in the marketplace for one-thousand paper dollars, instead of twenty paper dollars, is because the Federal Reserve has been flooding the marketplace, decade after decade, with paper money to fund the government’s operations.

    But the feds don’t like people figuring that out because it might cause them to begin wondering whether the Federal Reserve should be abolished for having inflicted so much damage on the American people through monetary debasement. Kahre exposed in a very real way what the Federal Reserve has done to our money.

    According to the Las Vegas Tribune Review, after his conviction Kahre said to the judge:

    “Your honor,” Kahre said when he stood to answer, “This last seventeen years of my life has been to get my issues” aired about taxation and the importance of a gold standard to back U.S. currency. “My life is basically over,” Kahre said, indicating that before sentencing he wants to “spend time with family and tie up some loose ends.”

    It’s obviously a sad day for Bob Kahre. It’s also a sad day for America.

  6. #5


    I see how this process benefits his subcontractors by saving them on taxable income, but I don't see how it benefits Mr. Kahre since he would still have to pay the full value of the coins but couldn't claim their purchase as a tax deductible expense, thereby making him fully liable to be taxed for the difference. Someone explain to me how Mr. Kahre himself is benefitting.
    CPT Jack. R. T.
    US Army Resigned - Iraq Vet.
    Level III MACP instructor, USYKA/WYKKO sensei
    Professional Hunter/Trapper/Country living survivalist.

  7. #6


    Quote Originally Posted by Icymudpuppy View Post
    I see how this process benefits his subcontractors by saving them on taxable income, but I don't see how it benefits Mr. Kahre since he would still have to pay the full value of the coins but couldn't claim their purchase as a tax deductible expense, thereby making him fully liable to be taxed for the difference. Someone explain to me how Mr. Kahre himself is benefitting.
    Loyalty is extremely valuable to businessmen, be it loyal employees, customers, or contractors.

    Also, remember that employers pay no small part of the taxes on employees in the style of matching contributions. Doesn't really apply to contractors, but it seems to me he had employees and treated them as well.

    Make Americans Cucks Again!

  8. #7


    That's placing an awful lot of trust on your subcontractors. Being in a trades industry where I hire subs regularly, I have only one subcontractor I trust to do the work right without supervision, but still not enough to make them worth that extra expense to me. He must be surprisingly trusting, or surprisingly naive.
    CPT Jack. R. T.
    US Army Resigned - Iraq Vet.
    Level III MACP instructor, USYKA/WYKKO sensei
    Professional Hunter/Trapper/Country living survivalist.

  9. #8


    I would assume the contractors wrote him a receipt at fair value of what the gold coins where worth not at face value.

  10. #9


    Sorry I'm pasting so many links everyone, this case interests me. lol

    On a 106-degree May afternoon in 2003, government agents raided several establishments belonging to Southern Nevada businessman Robert “Bobby” Kahre. With guns drawn, officials held more than 20 handcuffed workers in the sun without water as agents collected records and other materials.

    Kahre hadn’t committed a crime. He had upset the Internal Revenue Service by paying his workers based on the face value of gold and silver coins, versus the market value in the Federal Reserve system (the value of the coins in U.S. paper dollars). Even though the coins were in circulation, displayed a face value, and were regulated by Congress, the IRS’s confusing and endless tax code did not determine how to handle these gold and silver coins if used for payroll. The tax code only references dollars. It does not distinguish between coined money and paper money.

    Kahre didn’t opt for the precious metal bullion system without first doing his homework. He consulted monetary experts, engaged in extensive research, and even met with congressmen. Kahre’s conclusion was simple: While the currency in the precious-metal system was greater in value than the currency in the other system, as money and a medium of exchange, the law knows no difference between the face value of both currencies.

    The IRS expected Kahre to report his workers’ earnings based on the coins’ market value in the Federal Reserve system. Instead, he didn’t report or pay anything at all because the face value of the coins fell below the reporting threshold. The IRS alleged that Kahre and the other defendants paid at least $114 million (based on the Federal Reserve system) to workers. The use of these coins in trade is a direct challenge to the fiat money system now in place.

    “Bobby Kahre is the only person in the world I know of with the courage to do that,” said Joel Hansen, a Las Vegas attorney who represented one of the nine defendants in the case.

    While the purpose of the case was to identify the intent of the defendants, the trial that followed tested America’s dual monetary system and further validated that the U.S. greenback is quickly becoming more and more a worthless piece of paper.

    In 1985, Ron Paul and other congressmen challenged our country’s currency system, which was monopolized by Federal Reserve Notes (FRNs) — the familiar greenbacks in American wallets. The congressmen successfully pursued the Gold Bullion Coin Act, which required the U.S. government to mint and place gold coins in denominations of $50, $25, $10 and $5 into circulation based on demand. The coins are made of 91.67 percent pure gold.

    The ultimate purpose of the act was to allow Americans to invest in gold. However, it also brought sanity back to this country’s monetary system by establishing a dual system. Instead of the Federal Reserve solely providing the money supply by endlessly printing FRNs, the U.S. government now minted and circulated precious metal coins.

    In the mid-’90s, Kahre began exercising this alternate system. He compensated workers for their labor in the form of these gold and silver coins versus FRNs. The workers calculated their income and tax liability based on the face value of the coins.

    One gold coin with a face value of $50 currently equals $806 in FRNs. If a worker earns a $50 gold coin each week, that person takes home an annual income of $2,600 based on the precious metal system, which is below the income-tax reporting threshold for an employee. However, the value of the coins in FRNs — $41,912 — is not. That’s the basic idea.

    The IRS did not fancy Kahre’s gold-and-silver payroll system, and after seven years of operating his family businesses in this fashion, he and eight others found themselves as defendants in a Las Vegas federal courtroom. Kahre was charged with 109 counts of tax-related crimes, varying from tax evasion to willful failure to file and conspiracy to evade taxes. Fifty-two other counts were divided among the other defendants.

    While the case was about the intent of the defendants, it raised several issues. There was the issue of whether or not Kahre’s workers were considered independent contractors, who are responsible for paying their own taxes, or employees, who have their taxes withheld by their employer each pay period. Then there’s the issue of America’s dual monetary system. If there are two monetary systems, and the value of one system’s currency is greater than the other beyond its face value, what is the standard for determining the value of taxable income?

    No Federal Court of Appeals has ever ruled that the gold coins in question must be reported to the IRS based on FRN market value.

    “The defense showed that the defendants believed in good faith that a Federal Reserve Note is not the standard because Congress created the dual monetary system,” Hansen said. “The defendants believed that gold and silver coins are just as legitimate and legal as our other tender, the FRN.”

    Kahre certainly caught the attention of the IRS. In addition to operating his businesses via the gold-and-silver payroll system, according to testimony at the trial, he helped 35 other contracting companies do the same.

    But even though Kahre and his colleagues followed the dual monetary system mandated by Congress, the IRS didn’t care. To America’s most feared agency, the bottom line was Kahre’s workers weren’t taxed enough for their labor.

    Based partially on cases that pre-dated the 1985 Gold Bullion Coin Act, the judge in the case did not allow defense attorneys to argue that Kahre was justified to pay workers based on the face value of the coins. Based on case law, the court concluded that income had to be calculated based on the FRN fair market value, rather than upon the face value.

    A flaw with some of those cases was that each referred to double-eagle gold coins, which Franklin D. Roosevelt outlawed in 1934. Those coins are no longer in circulation like the coins minted by the U.S. government following the 1985 Act. The double-eagle coins were deemed to be property for tax purposes in those old cases.

    Of course, the judge’s rule was binding upon the parties and was followed by the defense attorneys at the trial. Hansen, under the good faith belief defense, was able to present evidence that his specific client, Alex Loglia, who performed research work for Kahre, did not have intent to commit tax crimes. This interesting twist allowed jurors to still hear the argument that Kahre was justified to pay workers based on the face value of the coins. The U.S. Supreme Court had long before ruled, in the Cheek case, that a good defense in a tax-evasion case is a person had good faith in not following certain tax laws.

    “The Supreme Court said, if they don’t have criminal intent, then they are not guilty of tax evasion,” Hansen explained. “That doesn’t mean you don’t have to pay the tax, but it means you didn’t commit a crime and won’t go to jail for a felony.”

    In 2005, Loglia penned a paper that earned him an ‘A’ from his law school professor Jay Bybee (who just happens to also be a 9th Circuit judge) on the gold-coin issue and the separation of powers. His paper took the position that, under Article 1, Section 8, Clause 5 of the Constitution, Congress alone had the power to coin money and set its value.

    Loglia’s position was that the judicial branch does not have this power.

    “The judge applied those old court cases, but we were still able to make the argument that Alex was not criminally liable because he believed in good faith in the use of the face value of the gold and silver coins for tax purposes,” Hansen said. “Loglia’s 100-page legal paper was great evidence for the jury of his good faith belief.”

    Beyond the courtroom, there is another significant issue with the Kahre case — it gives attention to the ever-decreasing value of the Federal Reserve Note.

    One Euro is now worth $1.45 in FRNs. A Chinese Yuan buys the same as $1.34 in FRNs. Even the Canadian dollar is now more valuable than our paper currency. Compared to the American buck, it’ll buy seven cents more in goods and services.

    “Because of how much stronger the Euro is compared to an American FRN, the Federal Reserve just pumped up to $50 billion of FRNs into Federal Reserve banks to prop up the banks,” Hansen said. “But when they do that, every dollar that you have in your pocket is now worth less.”

    However, America’s other monetary system — gold and silver coins — does not decrease in value. It becomes more valuable in terms of FRNs. Americans, though, rely on the FRN, and its rapid decline will sooner than later decimate the middle class, Hansen said.

    Take socialist Karl Marx’s theory, for example. He believed the most effective way to obliterate the middle class involved a system of progressive taxation coupled with inflation. In the Federal Reserve’s case, if the bank continues to inflate the currency so that everybody moves into higher and higher tax brackets, eventually everybody will pay 30 to 40 percent of their income to taxes in Federal Reserve Notes, all while the FRN decreases in value due to inflation.

    “By using the gold coins, Kahre was beating Karl Marx, the socialists and the liberals who want people to pay more and more so they can have bigger and bigger government,” Hansen said. “Kahre challenged the whole system and that’s why the IRS came down so hard on him and his associates.

    “The IRS doesn’t want this going on; they want you to use their fiat money and be forced into higher tax brackets through progressive taxation coupled with inflation. That way there’s no limit on the money they can issue and inflate.”

    On Sept. 17, after four months of trial and days of deliberation, the Las Vegas federal jury returned with its verdicts. The courtroom was crowded as the IRS and Department of Justice filled the entire area on their side of the chambers with its officials.

    Hansen was uncertain of what to expect. He just hoped that the jurors listened closely to the evidence presented.

    “I could tell in the closing arguments, as I was watching the jury, that they were sympathetic to what I was saying. But what they were going to do, I did not know,” he recalled. “I think the government, because it had packed the courtroom, was confident they were going to get numerous guilty verdicts.”

    Rather, jurors delivered zero guilty verdicts. Three defendants, all workers, were acquitted as well as Kahre’s mother, who worked as a runner for her son’s businesses. Two other defendants were partly acquitted — the jury hung on one count each. The jury also hung on all counts faced by Kahre, Loglia and Kahre’s sister, resulting in mistrials.

    “I’m telling you that I have never seen such a dejected group of people leave a courtroom in my life,” Hansen said of DOJ and IRS officials. “They were shocked. Of course, we were pleased.

    “The thing is, they had 161 counts and they did not get a guilty verdict on a single one. They got a big goose egg. We didn’t get not-guilty verdicts for everyone, but the government didn’t get anything.”

    The IRS was supposed to notify the judge in late October if the agency intended to retry the five defendants on the charges that resulted in a hung jury. The government waffled, indicating they would pursue another grand jury and issue superceding indictments. More information will be known by mid-November.

    Looking back, Hansen recalls what may have been a key turning point in the trial. The government called three accountants to testify. The defense asked each one, “What is the proper way to calculate income for purposes of the Internal Revenue Code if you are paid in a gold coin that has a $50 face value on it?” All three of them responded, “I do not know; I’ll have to research that.”

    “One of them had a masters degree in taxation!” Hansen observed, saying their answers made it difficult to prove the defendants willfully committed tax crimes. “If accountants and masters of taxation don’t know the answer to this question, how in the world can they expect anything different from an ordinary person who is confronted with a dual monetary system created by Congress?”

    Hansen believes it was uncalled for to prosecute Kahre and the other eight defendants criminally. The case revolved around a complicating and confusing legal issue. It should have been handled civilly, Hansen said, but the IRS wanted to make an example of these defendants because the federal government simply doesn’t want anyone paying a lower tax than what the feds determine should be paid.

    “If a coin says it is a $50 gold piece, and it says ‘In God We Trust,’ and the law says that it is legal tender, and it is in circulation, isn’t it reasonable for people to think that they can calculate their tax liability based on that?” Hansen asks. “If a tax accountant can’t answer that question, how can a common worker be guilty of a crime? The outcome of this case is a magnificent victory for those of us who believe that the United States of America should have an honest monetary system.”

  11. #10


    I'm confused now. The first article says he is going to jail. The second one says he was acquitted or hung jury.

    What is the last thing that happened?
    CPT Jack. R. T.
    US Army Resigned - Iraq Vet.
    Level III MACP instructor, USYKA/WYKKO sensei
    Professional Hunter/Trapper/Country living survivalist.

  12. #11


    Quote Originally Posted by Icymudpuppy View Post
    I'm confused now. The first article says he is going to jail. The second one says he was acquitted or hung jury.

    What is the last thing that happened?
    The bad one.

    IIRC, he went to jail, got acquitted, and then the fedgov found a way to get him into one of their courts. Back to jail.

    Pesky things, those Constitutionally mandated juries of our peers...

    Make Americans Cucks Again!

  13. #12


    Quote Originally Posted by Icymudpuppy View Post
    I'm confused now. The first article says he is going to jail. The second one says he was acquitted or hung jury.

    What is the last thing that happened?
    The first one.

  14. #13


    But isn't that a violation of the 5th amendment barring double jeopardy?
    CPT Jack. R. T.
    US Army Resigned - Iraq Vet.
    Level III MACP instructor, USYKA/WYKKO sensei
    Professional Hunter/Trapper/Country living survivalist.

  15. #14


    Quote Originally Posted by Icymudpuppy View Post
    But isn't that a violation of the 5th amendment barring double jeopardy?
    But if they barred double jeapordy Alex Trebec would only work fifteen minutes a day!

    They have ways around that. Like dropping the charges at the last minute if they know their case didn't go well. Or waiting until someone decides, ok it's legal, I can go do it again...

    Make Americans Cucks Again!

  16. #15


    Quote Originally Posted by Icymudpuppy View Post
    I see how this process benefits his subcontractors by saving them on taxable income, but I don't see how it benefits Mr. Kahre since he would still have to pay the full value of the coins but couldn't claim their purchase as a tax deductible expense, thereby making him fully liable to be taxed for the difference. Someone explain to me how Mr. Kahre himself is benefitting.
    May be this is exactly the crime that Mr. Kahre was accused of. I'm assuming he paid his workers with gold and silver coins and they filed an income tax using the coins face value. This way Mr. Kahre could pay them less so that he and his workers share the unpaid tax. Mr. Kahre at the same time filed his taxes claiming the labor cost using the fair value of the paid gold and silver.

    If he used face value on his taxes and his workers used face value in their tax returns the total taxes paid would have been approximatelly the same as when he and his workers both used fair value. But my guess is that IRS has a problem with the businessmen using a double standard - pushing workers to use face value in their returns while using fair value in his return. If this is the case, then I hate to admit IRS mihgt have a point.

  17. #16


    Buying gold coins is a net loss on face value. It's a business expense written off as a loss. I believe that is how he did it.

  18. #17


    Anyone have a copy of the Loglia paper referred to? Google came up with lots of refs but not the doc.

    "They sell us the president the same way they sell us our clothes and our cars. They sell us every thing from youth to religion the same time they sell us our wars. I want to know who the men in the shadows are. I want to hear somebody asking them why. They can be counted on to tell us who our enemies are but theyre never the ones to fight or to die." - Jackson Browne Lives In The Balance

  19. #18


    I know there have been IRS cases where the criminal charges are found not guilty, but than the civil tax courts get involved. Are the civil courts also trial by jury. I believe that any amt over $20 one can request a trial by jury, or has this been subverted as well.

  20. #19


    I can't believe this case has not had more prominence among us. This is a very important case and we need to get behind it. In all of the campaign excitement I must admit I completely forgot about this case in 2007 but this was the solution many of us were seeking.

    First of all let us review history because this case needs to go viral.

    Here is a Youtube video from 2007. I hope we are able to get some copies of this entire interview and video before they start disappearing. This video is a very good and includes actual footage of the raid and an interview with Robert Kahre. I have a feeling as soon as we get on this they will start disappearing fast.

    YouTube - The IRS vs. Robert Kahre

    Here is an old DP thread from 2007 when Mr. Kahre obtained a hung jury.

    I mention this thread because there is an important post in it. This one:
    Vegas paper gets subpoena to ID online commenters

    LAS VEGAS - A Las Vegas newspaper says it has been served a federal grand jury subpoena seeking information about readers who posted comments on the paper's Web site.

    The Las Vegas Review-Journal reported Tuesday that its editor, Thomas Mitchell, plans to fight the request, which the newspaper received after reporting on a federal tax fraud case against business owner Robert Kahre.

    The subpoena seeks the identities and personal information about people who posted comments on the story. The newspaper said prosecutors told the judge in the case that some comments hinted at acts of violence and the subpoena was issued out of concern for jurors' safety.

    Mitchell said anonymous speech is "a fundamental and historic part of this country." The newspaper would consider cooperating if specific crimes or real threats were presented, he said.

    The newspaper said the subpoena bears the name of U.S. Assistant District Attorney J. Gregory Damm, a lawyer on the Justice Department team that is prosecuting Kahre and others on charges including income tax evasion, fraud and criminal conspiracy.

    Grand jury proceedings are secret, and the subpoena is not a public record.

    A spokeswoman for the U.S. Attorney for Nevada declined to comment.

    The newspaper said it received the subpoena June 2, a week after its story describing the government's case against Kahre, a Las Vegas construction company executive accused of paying contractors with gold and silver U.S. coins based on the precious metal value of the coins but using the much lower face value of the coins for tax purposes. Kahre and the other defendants have pleaded not guilty.

    The story drew nearly 175 online comments by Monday night, most in support of Kahre and critical of the government and jurors and attorneys in the case.

    One commentator said: "The sad thing is there are 12 dummies on the jury who will convict him. They should be hung along with the feds."

    Another called Damm a "socialist, fascist Mormon" and a "Nazi moron."

    The comments are written under pseudonyms. Along with the real names of people who posted comments, the subpoena asks the newspaper for the writers' gender, birth date, physical address, telephone number, Internet service provider, IP address and credit card numbers.

    After a 2003 raid on Kahre's business, Kahre and several of his workers sued Damm, two Internal Revenue Service agents and others who were involved. That civil matter is pending.

    In 2007, Kahre sued Damm and agents of the FBI and IRS, alleging criminal behavior. U.S. District Court Judge David Ezra dismissed the complaint in December, and Kahre appealed to the 9th U.S. Circuit Court of Appeals.

    Two years ago, Damm prosecuted a similar tax case against nine defendants, including Kahre. The trial ended with no convictions and four acquittals.

    Five defendants were partially acquitted, and two of them were dropped from the indictment that generated the current case.
    That news article no longer exists on the newspapers site so make sure you save a copy.

    Now that we are focusing on the Federal Reserve this should be a forefront issue. This case illustrates the fallacy of the Federal Reserve.

    Here are the coins we are talking about, American Eagle bullion coins:

    This is the legislative act we are talking about, Gold Bullion Coin Act of 1985:
    Complete text of the Congressional Act

    An Act
    To authorize the minting of gold bullion coins.

    Be it in enacted by the Senate and House of Representatives
    of the United States of America in Congress assembled,

    Section 1. This Act may be cited as the “Gold Bullion Coin Act of 1985”.

    Minting Gold Bullion Coins

    Sec. 2. (a) Section 5112(a) of the title 31, United States Code, is amended by adding at the end thereof the following new paragraphs:

    “(7) A fifty dollar gold coin that is 32.7 millimeters in diameter, weighs 33.931 grams, and contains one troy ounce of fine gold.
    “(8) A twenty-five dollar gold coin that is 27.0 millimeters in diameter, weighs 16.996 grams, and contains one-half troy ounce of fine gold.
    “(9) A ten dollar gold coin that is 22.0 millimeters in diameter, weighs 8.483 grams, and contains one-fourth troy ounce of fine gold.
    “(10) A five dollar gold coin that is 16.5 millimeters in diameter, weighs 3.393 grams, and contains one-tenth troy ounce of fine gold.

    (b) Section 5112 of title 31, United States Code, is amended by adding at the end thereof the following new subsection:

    “(i)(1) Notwithstanding section 5111 (a)(1) of this title, the Secretary shall mint and issue the gold coins described in paragraphs (7), (8,) (9), and (10) of subsection (a) of this section, in quantities sufficient to meet public demand, and such gold coins shall

    “(A) have a design determined by the Secretary, except that the fifty dollar gold coin shall have –
    “(i) on the obverse side, a design symbolic of Liberty; and
    “(ii) on the reverse side, a design representing a family of eagles, with the male carrying an olive branch and flying above a nest containing a female eagle and hatchlings;
    “(B) have inscriptions of the denomination, the weight of the fine gold content, the year of minting or issuance, and the words ‘Liberty’, ‘In God We Trust’, ‘United States of America’, and ‘E Pluribus Unum’, and
    "(C) have reeded edges.

    “(2)(A) The Secretary shall sell the coins minted under this subsection to the public at a price equal to the market value of the bullion at the time of sale, plus the cost of minting, marketing, and distributing such coins (including labor, materials, dies, use of machinery, and promotional and overhead expenses).

    “(B) The Secretary shall make bulk sales of the coins minted under this subsection at a reasonable discount.

    “(3) For purposes of section 5132(a)(1) of this title, all coins minted under this subsection shall be considered to be numismatic items”.

    (c) Section 5116(a) of title 31, United States Code, is amended by adding at the end thereof the following:

    “(3) The Secretary shall acquire gold for the coins issued under section 5112(i) of this title by purchase of gold mined from natural deposits in the United States, or in a territory or possession of the United States, within one year after the month in which the ore from which it is derived was mined. The Secretary shall pay not more than the average world price for the gold. In the absence of available supplies of such gold at the average world price, the Secretary may use gold from reserves held by the United States to mint the coins issued under section 5112(i) of this title. The Secretary shall issue such regulations as may be necessary to carry out this paragraph”.

    (d) Section 5118(b) of title 31, United States Code, is amended –
    (1) in the first sentence, by striking out “or deliver”; and
    (2) in the second sentence, by inserting “(other than gold and silver coins)” before “that may be lawfully held”.

    (e) The third sentence of section 5132(a)(1) of title 31, United States Code, is amended by striking out “minted under section 5112(a) of this title” and inserting in lieu thereof “minted under paragraphs (1) through (6) of section 5112(a) of this title”.

    (f) Notwithstanding any other provision of law, an amount equal to the amount by which the proceeds from the sale of the coins issued under section 5112(i) of title 31, United States Code, exceed the sum of –
    (1) the cost of minting, marketing, and distributing such coins, and
    (2) the value of gold certificates (not exceeding forty-two and two-ninths dollars a fine troy ounce) retired from the use of gold contained in such coins,
    shall be deposited in the general fund of the Treasury and shall be used for the sole purpose of reducing the national debt.

    (g) The Secretary shall take all actions necessary to ensure that the issuance of the coins minted under Section 5112(i) of title 31, United States Code, shall result in no net cost to the United States Government.

    PUBLIC LAW 99-185—DEC. 17, 1985 99 STAT. 1179

    Effective Date
    Sec 3. This Act shall take effect on October 1, 1985 except that no coins may be issued or sold under section 5112(i) of title 31, United States Code, before October 1, 1986.
    Platinum was authorized in 1996:


    The Committee has included two provisions (Sec. 523 and Sec. 524) which allow the Secretary of the Treasury to expand the sale of gold bullion and platinum coins for the Numismatic Coin program. These provisions will allow the U.S. Mint, in addition to its American Eagle gold bullion coins (.9167 fine), to mint .9999 gold bullion coins and platinum bullion coins.

    Recent market studies identify growing markets for gold and platinum bullion products. The studies, however, reveal a strong preference in these markets for `pure' gold (24 karat) bullion coins. Sec. 523 will allow the U.S. Mint to enter this market in addition to its command of the 22 karat market. Sec. 524 will allow the U.S. Mint to enter the platinum coin market.

    Receipts from the sales of these additional programs is estimated at $21,100,000 in 1997 and $88,900,000 over five years and will be deposited into the General Fund of the Treasury for deficit reduction.
    Directly from the U.S. Mint:
    All American Eagles are legal tender coins, with their face value imprinted in U.S. dollars.

  21. #20


    There are tons of details here that need to be flushed out. For instance Mr. Kahre paid the court in silver coin and they accepted it at face value. Just that alone illustrates the contradiction of the whole thing.

    Let me set up the premise:
    My business buys American Eagle gold bullion coins at market value. In the course of my business I contract with your business for services. I offer to pay that debt in legal tender of a $20.00 American Eagle gold bullion coin. You received payment of $20.00 in legal tender.

    The business has a gold acquisition expense of gold coins at market value but was only able to settle its contractual debt for services for legal tender values and suffered a net loss. The business receives a deduction.

    The recipient received payment of $20 for 52 weeks in a taxable year which sums to $1040.00 of taxable wages. A trivial amount in which a return is not even required.

    The IRS is trying to assert a double standard. It is saying if you pay your taxes with legal tender coins we will only accept the coins at legal tender face value but if you receive a legal tender coin you must pay taxes based on market value.

    The whole thing is horse$#@!.

  22. #21


    I found the full 28 minute interview here:

    Three ways to capture a video from the internet:
    Last edited by Live_Free_Or_Die; 08-27-2009 at 11:57 PM.

  23. #22


    how is this any different than the banks or the FED holding toxic assets "bad mortgages" on their sheets at or near par? The banks don't have to report the losses until they are actually sold. There is no more mark to market on these loans, they are simply taken at face value on the balance sheets.

    Yes what is happening with the coins is the opposite, but why should anyone have to claim the value of the sold coins on the market if they are still holding them in possession?

    Once the coins are offered as legal tender, then the face value of the coins has been accepted. This is the same thing as the banks reporting all those 250k alt and sub loans are still actually worth 250k plus interest even tho the loans are non performing ( no interest cash flow) AND the underlying asset is falling in market value.

    I agree, this case needs further evaluation. Was this a scam or did this guy act within the constraints of the law? Regardless, this is a good case for why we need competing currency as well as why we need to get rid of the income tax.

    I wonder if Campaign for Liberty has an opinion about this case.

  24. #23


    This case has a lot of history and the intent of all of the defendants involved was to act within the law. Watch the video link I posted it will get you up to speed. I do not imagine this sole video to survive long on the internet.

  25. #24

  26. #25


    Previous threads on this topic. Total views on all of the previous threads is about 7000 views, discouraging.

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