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CONTENTION:
FEDERAL RESERVE NOTES ARE NOT INCOME

Charleston Voice
Dec. 28, 2005

Although probably not applicable to people on the CV list, it's best to be aware of the IRS's view of fiat notes not being "real" money such as gold and silver, and the harsh treatment anyone would receive should they push the issue. A link for safe deposit boxes at end of text.

As you can readily see interpretation of our Constitution has been left up to the federal government themselves to "interpret". The Constitution as you know is to constrain and define the limits of the fedgov. For them to be able to interpret their own defined restrictions is tantamount for us [through our Congress] to handing the keys to the chicken coop over to the fox. 19th century South Carolina statesman John Calhoun made every effort on numerous occasions to warn the people of the extended reach of the Supreme Court.

So, then, don't become a martyr. You do yourself, your family and your country no good behind bars.


C. Contention: Federal Reserve Notes are not income.

Some assert that Federal Reserve Notes currently used in the United States are not valid currency and cannot be taxed, because Federal Reserve Notes are not gold or silver and may not be exchanged for gold or silver. This argument misinterprets Article I, Section 10 of the United States Constitution.

The Law: Congress is empowered "[t]o coin Money, regulate the value thereof, and of foreign coin, and fix the Standard of weights and measures." U.S. Const. Art. I, 8, cl. 5. Article I, Section 10 of the Constitution prohibits the states from declaring as legal tender anything other than gold or silver, but does not limit Congress' power to declare the form of legal tender. See 31 U.S.C. 5103; 12 U.S.C. 411. In United States v. Rifen, 577 F.2d 1111 (8 th Cir. 1978), the court affirmed a conviction for willfully failing to file a return, rejecting the argument that Federal Reserve Notes are not subject to taxation. "Congress has declared Federal Reserve notes legal tender . . . and federal reserve notes are taxable dollars." Id. at 1112. The courts have rejected this argument on numerous occasions.

Relevant Case Law:
United States v. Rickman, 638 F.2d 182, 184 (10 th Cir. 1980) - The court affirmed the conviction for willfully failing to file a return and rejected the taxpayer's argument that "the Federal Reserve Notes in which he was paid were not lawful money within the meaning of Art. 1, 8, United States Constitution."

United States v. Condo, 741 F.2d 238, 239 (9 th Cir. 1984) - The court upheld the taxpayer's criminal conviction, rejecting as "frivolous" the argument that Federal Reserve Notes are not valid currency, cannot be taxed, and are merely "debts."

United States v. Daly, 481 F.2d 28, 30 (8 th Cir.), cert. denied, 414 U.S. 1064 (1973) - The court rejected as "clearly frivolous" the assertion "that the only 'Legal Tender Dollars' are those which contain a mixture of gold and silver and that only those dollars may be constitutionally taxed" and affirmed Daly's conviction for willfully failing to file a return.

Jones v. Commissioner, 688 F.2d 17 (6 th Cir. 1982) - The court found the taxpayer's claim that his wages were paid in "depreciated bank notes" as clearly without merit and affirmed the Tax Court's imposition of an addition to tax for negligence or intentional disregard of rules and regulations.

Note: This page contains one or more references to Internal Revenue Code (IRC) sections. A link to the Internal Revenue Code is included for the convenience of those who would like to read the technical reference material. To access the applicable Internal Revenue Code sections visit the Tax Code, Regulations, and Official Guidance page.

Safe Deposit Boxes:
http://www.irs.gov/irm/part5/ch10s03.html#d0e127124


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