Underground Economy???

[RTHolmes]

if cashmoney is the only taxable thing, then why doesnt everyone request their salary paid in gold? you really think the IRS wouldnt want a cut of that gold?

what about shares? they arent cash. steve jobs for a long time had a salary of $1, plus $ms of shares. I'm guessing the IRS didnt just tax the $1...

[TheBug]

"Barter dollars or trade dollars are identical to real dollars for tax reporting."


From the IRS website: http://www.irs.gov/businesses/small/article/0,,id=188095,00.html

[RTHolmes]

If you conduct any direct barter - barter for another’s products or services - you will have to report the fair market value of the products or services you received on your tax return.

yup, same as the UK.

[CAP1]

"Barter dollars or trade dollars are identical to real dollars for tax reporting."


From the IRS website: http://www.irs.gov/businesses/small/article/0,,id=188095,00.html

the very simple way then, is to not leave any paper trail.

a simple handshake will do.

[uptown]

I'll direct this question to my attorney.............

[CAP1]

I'll direct this question to my attorney.............

and of course, you'll trade services for his services/info. 

[BigPlay]

Any attempt at evading the tax system is indeed illegal.  While bartering in and of itself is legal, not reporting income of said barter is illegal.  For example,if you are an electrician and you agree to do an electrical job for someone at $500 and then they agree to give you a computer with a market value of $500, then that $500 is taxable income to you.

 WRONG  ! How is the government able to determine what the value of said computer is or for that matter the value of the electrician's work unless they put a dollar amount on it. If no money is exchanged then there is no income earned. I have the freedom to do anything for anybody as a favor and he has the freedom to give me anything as a favor in return without being taxed. What if ltCap and I were friends and I helped LtCap fix a door in his shop and in return he changed the sparkplugs in my truck that is not taxable income.

[BigPlay]

"Barter dollars or trade dollars are identical to real dollars for tax reporting."


From the IRS website: http://www.irs.gov/businesses/small/article/0,,id=188095,00.html

That maybe true to some extent but  proving you are trading dollars in the form of services is almost impossible to prove and enforce. Like I said if I want to do something for a friend as a favor and he me without the discussion of money amounts or bartering what can they tax? A fictitious amount made up by the IRS?

[RTHolmes]

WRONG  ! How is the government able to determine what the value of said computer is or for that matter the value of the electrician's work unless they put a dollar amount on it. If no money is exchanged then there is no income earned. I have the freedom to do anything for anybody as a favor and he has the freedom to give me anything as a favor in return without being taxed. What if ltCap and I were friends and I helped LtCap fix a door in his shop and in return he changed the sparkplugs in my truck that is not taxable income.

nope, hes RIGHT! they do put a dollar amount on it, the market value. if anything is exchanged there is still income earned. you do not have the freedom to exchange without being taxed, as the direct quotes from the IRS website prove. the example you gave according to the IRS is taxable income. just because you don't declare it on your tax return does not make it untaxable.

underground trading is not tax avoidance by being smart and using some loophole, it is tax evasion and if you chose to do so you should be aware of that, misunderstanding tax law in this way is the reason why some people are made bankrupt and in some cases imprisoned.

[Vudak]

Just remember two things:

1. The burden of proof is on the prosecution; and
2. This means don't start forum posts about the topic!

[BigPlay]

nope, hes RIGHT! they do put a dollar amount on it, the market value. if anything is exchanged there is still income earned. you do not have the freedom to exchange without being taxed, as the direct quotes from the IRS website prove. the example you gave according to the IRS is taxable income. just because you don't declare it on your tax return does not make it untaxable.

underground trading is not tax avoidance by being smart and using some loophole, it is tax evasion and if you chose to do so you should be aware of that, misunderstanding tax law in this way is the reason why some people are made bankrupt and in some cases imprisoned.

sounds to me like you need a better accountant or tax attorney. Do you claim the money you make from garage sales? There is a minimum amount of money made that is non taxable before it becomes taxable just like income taxes, people that don't make the minimum taxable requirements do not pay taxes. Now if you barterer every transaction you made and didn't exchange monies then you have a problem, but a $300 cow in exchange for a service or product would be below the taxable amount. There are other things to consider in regards to trading services, how much of the trade was profit . Profit is the taxable denominator not the total sale or trade. This cow that was traded had costs to get it to a full grown cow. Now if he had lets say $150 in raising the cow and traded it for $300 then only $150 is taxable. What if the trade he made was for an item that was worth $50, then he has a $100 loss. It is far more complicated then it seems and jumping all over a guy for bardering and making implications like tax evasion is a very diffcult thing even for the IRS to prove on matters as small as simple bartering between friends.

[CAP1]

nope, hes RIGHT! they do put a dollar amount on it, the market value. if anything is exchanged there is still income earned. you do not have the freedom to exchange without being taxed, as the direct quotes from the IRS website prove. the example you gave according to the IRS is taxable income. just because you don't declare it on your tax return does not make it untaxable.

underground trading is not tax avoidance by being smart and using some loophole, it is tax evasion and if you chose to do so you should be aware of that, misunderstanding tax law in this way is the reason why some people are made bankrupt and in some cases imprisoned.

how do they put a dollar amount on the door BP installed? there's many many different varients, and qualities.

how do they put a dollar amount on the spark plugs i install in his car? there's at least 1/2 dozen different plugs that can be installed in any car, and they all have different cost. then there's the time for both. labor rates vary greatly. i charge different labor rates for fleets than i do to the average joe. i charge different labor rates to military personnel than i do to others(much lower for military).

 as for the barter thing......it all still comes back to that handshake.

prove i didn;t install that door myself while BP was installing his plugs, using my bay. 

[RTHolmes]

sounds to me like you need a better accountant or tax attorney.

I'd love to know how you can assess the competence of my accountant from this thread when I havent quoted her in this thread.

Do you ... $100 loss.

Lots of small detail here, which doesnt get away from the fact that your previous post shows a fundamental misunderstanding about the way income and expenditure are calculated for tax purposes, specifically that they dont have to be in the form of money changing hands.

It is far more complicated then it seems and jumping all over a guy for bardering and making implications like tax evasion is a very diffcult thing even for the IRS to prove on matters as small as simple bartering between friends.

hey i'm not having a go at anyone for bartering, just saying that its not a cunning loophole to avoid tax, it is evading tax. like any evasion, most likely small amounts will go under the radar. however if you base your entire life on the underground economy for 20 years (ie not paying any tax) you shouldn't be surprised if you get a very large bill from the IRS if they stumble across your trading activities.

[CAP1]

to be totally honest, when i do any barter deals with people, i do it more because i don't like spending money....and they generally feel the same.

we both know it still costs us, but since we're not putting any cash out, it's a lot easier to do.

[SEraider]

I am for underground economies.  The Dollar is debasing and the IRS is a sham cartel organization.  The IRS from what I read has no law backing it's legality.  Former IRS agents tried to find the law that legalizes it's existence and could not find it.  The IRS has it's own police force to enforce tax collection so it makes me wonder.  BTW, our checks don't go to the IRS anymore.  Recently it is now the "US treasury" because so many people contested the legitimacy of the IRS.  But there is a US treasury (legal) so they got around this.

We pay too much taxes for the benefit of elite corporate financial types through interest on the country's debt and they have their organization in tax shelters in the Caman islands to avoid taxes.  I have no love loss for these organizations.  Congress turns the other way because they fund every senator and congressman and our presidents.

As far as I am concerned, small to moderate taxes (15% lets say on flat taxes) should pay to defend our nations sovereignty and not fund an empire.  We are paying far more and this is immoral!

When a local economy has it's own currency, your talking about soveringty so I hope it does not get too big otherwise the feds will drop in.

If anybody can find the law that legitimizes the IRS, by all means let me know.