From: Michael S. Lorrey (mike@datamann.com)
Date: Mon Mar 06 2000 - 06:30:33 MST
Billy Brown wrote:
> Michael S. Lorrey wrote:
> > There is no national sales tax, and there is no state sales tax in my
> state,
> > outside of meals & rooms, and professional services, so I don't need to
> declare
> > anything. Barter is not illegal. The IRS wishes it were, though. If no
> cash
> > changes hands, then how do they valuate the merchandise? Retail,
> wholesale,
> > distributor, or cost? How do I make out then? I do professional services
> in
> > exchange for goods, and I will exchange goods that I don't need and don't
> value
> > for goods that I would normally have to buy at retail. Since the value of
> my own
> > property to me is my cost, not the retail value, I gain 30-50% just on a
> > transaction on that basis. Many people will give me a good discount as
> well on
> > their goods for doing a barter transaction, on the order of 10-30%. Almost
> all
> > of my computer equipment has been purchased in this manner.
>
> This gets very complex, and I'm not a tax accountant, so I can't tell you
> every detail. However, it is my understanding that state, local and federal
> agencies are virtually unanimous in claiming that barter transactions are
> legally equivalent to monetary transactions. If a particular transaction is
> not taxable in the first place it obviously doesn't matter, but if it is
> taxable you're supposed to pay the tax whether you use money or not.
However, since I'm in a state that has no sales tax, and there is no national
sales tax, then I'm no breaking any laws. People don't realize that at least
half of the power that the IRS has over you is simply due to the fact that
people have been trained to BELEIVE that the IRS has power over them, kind of
like Freddy Kruger. Granted the Taxpayers Bill of Rights Act was a godsend in
mandating that the IRS comply with our presumption of innocence and right
against self-incrimination. Refusing to provide the IRS with any evidence
against you is the first step to eliminating their power over you. They can no
longer come to arbitrary or unsupported evaluations of your worth, your
property, or your income anymore, and they are dependent upon you giving them
the evidence they need to come to acceptable evaluations. Refusing to
incriminate yourself via your 5th amendment rights is your sheild against their
opressive confiscation.
> The IRS has labyrinthine rules covering schemes for paying wages via barter,
> and how you are supposed to calculate the cash value of the goods or
> services involved. States with income taxes mostly have similar rules.
> Sales taxes often don't cover small personal transactions in the first
> place, but where they do it usually doesn't matter whether cash changes
> hands or not. Businesses, of course, are generally expected to collect
> sales tax even on barter transactions, and once again there are byzantine
> rules about how you are supposed to calculate cash values.
Since I am a resident of a state that has no sales or income tax, and I have no
point of presence in any state that does have such taxes, and states that do
have such taxes cannot collect them on interstate sales to states that have no
such taxes, I am acting completely within my rights. Using barter helps
eliminate the trail of evidence that the IRS can use against me if it decides to
target me. Hell they lost my 1997 tax return (though they cashed my check to
them), and are now insisting that I file again for that year. I've decided to
just ignore them. They have yet to ask me about my 1998 or 1999 taxes. As far as
they are concerned, I am a rather poor person who doesn't make enough money for
it to be worthwhile for them to go after me.
> Mind you, a lot of these rules are not well enforced, due to the obvious
> problems involved in collecting evidence. However, people who rely heavily
> on barter to avoid taxes do tend to get prosecuted, especially if the dollar
> value of the goods involved is large. In essence, then, using barter may
> make tax evasion easier to get away with, but it doesn't mean you aren't
> breaking the law.
The people who get prosecuted are those that flaunt their wealth, and are easily
assessed. Having a half a million dollar house, a Mercedes and a boat doesn't
sqare with a person who doesn't make enough money to have to file for taxes. If
you want to fly under the radar, you have to live under the radar. Don't
register high value items in your name like cars or boats, don't have large bank
loans, etc. Buy used cars, pay cash for real estate, keep your bank accounts
offshore, etc.
--
TANSTAAFL!!!
Michael S. Lorrey
Director, Grafton County Fish & Game Assoc.
http://www.lorrey.com/gcfga/
Member, Extropy Institute
http://www.extropy.org
Member, National Rifle Association
http://www.nra.org
"Live Free or Die, Death is not the Worst of Evils."
- General John Stark
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