Aces High Bulletin Board
General Forums => The O' Club => Topic started by: RipChord929 on July 19, 2009, 09:35:55 AM
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I was wondering if any of you ppl participate in the "underground economy"???
There has been alot of talk about it at the local town pub lately... There are alot
of ppl who are fiercely independant around my area.. (West coast of Oly Peninsula
WA St.) Thats why I have found my home here, 16yrs.. I fit right in, LOL!!!
The way things are going, (and by the scuttlebutt) It looks like this is going to be
a fairly important aspect of life around here in the near future...
If you already participate, how so? And any Ideas that would further this movement
would be very interesting to hear...
(If you already do, and don't really want to talk about it, I understand!!!)
But give a thumbs up, to show your feelings about it...
Example: About a month ago, I swapped a full grown steer,(on the hoof) for a fillup of
my home fuel tanks.. about 350gallons gasoline, and 100gallons of diesel... No tax!!!
I'm not talking about drugs, and don't really want to hear about that..
:salute RC
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I don't think it is wise to discuss the participation of illegal activities and to enquire how to go about doing it. I would edit you post before an employee of HTC see it.
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I don't think it is wise to discuss the participation of illegal activities and how to go about doing it. I would edit you post before an employee of HTC see it.
My thoughts exactly....
"Underground economy" might as well read "illegal economy".
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doesnt have to be illegal activities (apart from the tax evasion aspect.) in fact with a pure barter economy there may be no tax liability at all.
eg. I grow vegetables and farm goats, then exchange those for labour from a chippie and a brickie to build me a new barn.
then again the guys at the pub might be talking about selling crack...
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doesnt have to be illegal activities (apart from the tax evasion aspect.) in fact with a pure barter economy there may be no tax liability at all.
eg. I grow vegetables and farm goats, then exchange those for labour from a chippie and a brickie to build me a new barn.
That doesnt really fall under underground economy according to last couple of economics classes I took.
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well I can pop over to france, load up a van with booze and studmuffins then sell them at home. thats black/grey marketeering although selling booze and studmuffins isnt illegal per se, the illegality comes from avoiding duty/taxes.
i could do the same with weed from holland, but possessing then distributing it would be a criminal offense.
any underground economic activity is illegal by definition, but thats the distinction I was trying to make :)
edit: lol@ studmuffins, in the uk f.a.g.s is slang for cigarettes :lol
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So it's illegal for us to trade our tomatoes for the neighbor's cucumbers? :confused:
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well if you work for a farmer and instead of a salary you were "paid" in the equivalent value of tomatos, I'm pretty sure the govt would still want the same amount of income tax from you (benefits in kind.)
if you grow tomatos and sell them, thats taxable income. if you grow them then barter them you've still generated income, although in the form of cucumbers.
"If it moves, tax it..."
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I always wanted to be a rebel. :lol
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My thoughts exactly....
"Underground economy" might as well read "illegal economy".
Ditto! You may want to go to Flamewarriors.com to post this and get some real feedback.
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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.
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Barter is legal. Taxes are not due when items of equal value are exchanged between parties.
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Barter is legal. Taxes are not due when items of equal value are exchanged between parties.
So, what you're saying is I should only be taxed on the portion of my wages that I save? Interesting...
(I think the IRS disagrees...)
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I don't think it is wise to discuss the participation of illegal activities and to enquire how to go about doing it. I would edit you post before an employee of HTC see it.
:lol the longer this sham errr stimulus continues the more you will see this sort of thing. I seriously doubt that the Gov has the time to go after people struggling to get by, don't they have the rich people to chase around first?
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Rich people can afford effective legal representation.
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So, what you're saying is I should only be taxed on the portion of my wages that I save? Interesting...
(I think the IRS disagrees...)
I believe what he is saying is just like making a donation to a charity. If you make a $100 donation and recieve a meal (such as a BBQ brisket meal) you can't claim a $100 donation as a whole. You have to deduct the value of the meal you received in return then you can claim the balance as a donation. If you received something of equal value then you have no donation deduction.
Sales tax is only for SALES. Now if you have a TRADE tax.......
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I believe what he is saying is just like making a donation to a charity. If you make a $100 donation and recieve a meal (such as a BBQ brisket meal) you can't claim a $100 donation as a whole. You have to deduct the value of the meal you received in return then you can claim the balance as a donation. If you received something of equal value then you have no donation deduction.
Sales tax is only for SALES. Now if you have a TRADE tax.......
My wage is an equal trade for my labor. There is no net gain. This is an agreement that each of us makes with our employer. You say "I will do X and it is worth X". Your employer agrees "You will do X and it is worth X". This is an even trade. Now, you and your neighbor decide "I will give you X tomatos and you will give me X radishes". You neighbor agrees "You will give me X tomatos and I will give you X radishes".
Both of these are identical transactions. If one is taxable, so is the other.
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But only one involves money.
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My wage is an equal trade for my labor. There is no net gain. This is an agreement that each of us makes with our employer. You say "I will do X and it is worth X". Your employer agrees "You will do X and it is worth X". This is an even trade. Now, you and your neighbor decide "I will give you X tomatos and you will give me X radishes". You neighbor agrees "You will give me X tomatos and I will give you X radishes".
Both of these are identical transactions. If one is taxable, so is the other.
Your wage is not taxed under SALES tax. That is income tax.
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Your wage is not taxed under SALES tax. That is income tax.
Oh.... do tell how my wage isn't taxed by sales tax. This should be interesting!
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Last I checked one could only be taxed on what is purchased with / what you get paid for in currency.
Barter does not use currency ergo it cannot be taxed.
Said example of trading your $500 worth of labor for a $500 computer ... well, that $500 computer already paid tax by the person who purchased it with currency (the retailer, the owner bartering it to you, etc)..and your labor is precisely that: yours. The gov. can't dictate that you have to charge currency for your labor.
Or, better yet, if I grow a year's worth of vegetables and barter them for a year's worth of meat from a cattle rancher... the only thing im exchanging tax-free is my labour. Both the meat and the vegetables require land to grow on (you pay taxes for that), both require upkeep (fertilizer/cow feed, fuel, electricity, etc) which in most cases, is also taxed. So the question is... am I cheating the gov. or is the gov. cheating me when it comes to taxes?
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On the flip side I have to pay taxes on the computers, furniture, trucks and other office things when I buy them.... and then every year they are owned by my company. Every single year I am taxed for everything I own already over and over. Criminal isn't it.
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Last I checked one could only be taxed on what is purchased with / what you get paid for in currency.
But only one involves money.
tax law is different worldwide but in the UK there is the concept of "benefits in kind". A typical slary package will include currency and "benefits" eg. a company car. your tax liability includes the value of the company car. someone who earns £25k and has a company car which they have also for personal use will pay more tax than someone who earns £25k without the car.
or ... a rich uncle dies and leaves you £1m in cash, you'll pay tax. if he leaves you £1m in shares, no tax? £1m in property, no tax? £1m in radishes ... ?
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Yep,
I started doing this sort of thing this week. I need some work done on my truck (very little) and a friend needs his computer reloaded. Also around here there is "local Money". It is exchanged for US dollars + about 5% (1.00 usd = 1.05 other) so when you shop at a store that accepts these "dollars" you get more for your money. It was done here and many places in our country durring the deperesion and is making a comeback. Being the tax is still payed, uncle sugar still gets his money so he keeps his mouth shut.
But more and more here at the plant we are exchanging services. Fall is comming soon and a few of the prople here have large gardens with corn, onions and the like. I set up 2 deals with them already (which I an doing in advance). As strange as it sounds, it gives us something to talk about besides the hard times.
One I just thought about while writing this message, with the price of ammo, I think I'm going to offer some 3030 rounds and other support and have one of the hunters take a dear (or split one) with me. hmmmmmmm
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Look at it as a "free trade agreement" If governments can do it, well.....
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I've read about some places that have made their own currency that can only be spent locally..
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Barter can not be taxed as no money actually moves between an entity. If you barter/trade for a good deal then you have done nothing. In fact you already paid taxes when you bought the land, etc... to grow the animal and they paid taxes when they bought the fuel so nothing is going on illegally here.
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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.
technically, there is no income from a barter deal.
that computer in your example is simply a product traded in exchange for a service. there was no money involved.
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My wife owns a large house cleaning business in Austin. She barters all the time with her clients. Each week she has a massage, piano and guitar lessons. Its great for me because their is no money going out of pocket and her cost is only in chemicals.
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tax law is different worldwide but in the UK there is the concept of "benefits in kind". A typical slary package will include currency and "benefits" eg. a company car. your tax liability includes the value of the company car. someone who earns £25k and has a company car which they have also for personal use will pay more tax than someone who earns £25k without the car.
or ... a rich uncle dies and leaves you £1m in cash, you'll pay tax. if he leaves you £1m in shares, no tax? £1m in property, no tax? £1m in radishes ... ?
A company car is almost as if you were leasing your own vehicle but without paying the monthly fee. If you agree to receive a company car as a benefit then someone has to pay the tax on the vehicle and the company is at that point dumping that on you (since you're using it). In this case it is not a barter agreement, its a business agreement between you and your employer and there is currency involved in between (your salary and the fact the car does have to pay tax).
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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...
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"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 (http://www.irs.gov/businesses/small/article/0,,id=188095,00.html)
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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.
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"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 (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.
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I'll direct this question to my attorney............. :angel:
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I'll direct this question to my attorney............. :angel:
and of course, you'll trade services for his services/info. :D :noid :noid
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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.
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"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 (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?
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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.
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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!
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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.
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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. :D
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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.
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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.
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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.
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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. :D
exactly Cap, I have been audited so many times I can't count and only owed money once. I have had my business for 30 years and have come to know alot about how the tax system works. I'm not saying I know everything but enough to avoid making a major mistake. I do know one thing and that is the IRS isn't intrested in small stuff, they don't have the man power first of all to chase around all the questionable transactions, second many times if they recognize the accountants name that you use they Will avoid even auditing you. I had a CPA that won every case brought up against his clients and when I hired him the audits stopped cold, they got tired of losing. I became friends with him and he was the one who enlightened me one the workings of the IRS. In a nut shell he told me that the bottom of the barrel end up working for the IRS. But you will get the people that really do not have experience with anything more than the short form and continue to highlight the rules. Notice how vague the IRS is about telling you about any legal loop holes. They force people to hire tax attorneys to bring them into the light.
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http://www.irs.gov/taxtopics/tc420.html (http://www.irs.gov/taxtopics/tc420.html)
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http://www.irs.gov/taxtopics/tc420.html (http://www.irs.gov/taxtopics/tc420.html)
read the text , it says that certain forms of bartering maybe exempt. I believe the section is there for people running businesses that exclusively barter or partially barter as a form of income. I believe the poster of this thread was simply trading a cow for services, not attempting to conduct the trade from a business standpoint.
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Yep, a square deal, and a handshake, is good enough for most decent and honest ppl..
Ah, never thought about the ammo thing! Maybe I'll have to break out my Lee loadmaster
and start crankin out the .223 and .308 ammo... Got tons of cases, and lots of powder/primers...
And I know where to get bullets in wholesale bulk... Thanks for the idea!!!
When I was actively running my own shop, I always preferred greenbacks over Checks or plastic...
That way the bank is never involved in those transactions, so the cash just dissappears into my safe...
Just love Cash!!!
Not too long ago, an older local guy bought a used Harley.. He rode it for a few months and noticed a rumbling
noise/feeling coming from the transmission, so he brought it to me.. It turns out the previous owner had
just installed a clutch, trying to fix the rumble... It didn't!!! Pulled the trans out, (easy on a divorced case),
and the input bearings were shot, nylon shoe's on the 1st/2nd shift fork were missing, shift fork grinding on the 1st/2nd slider.. There's the rumble!!! I ordered up the parts over the internet, rebuilt the trans, reinstalled it.. When he came to pick it up, he was grinnin like a fool, LOL!! He whipped out his checkbook, after looking over the workorder.. Then I told him that if he paid in cash, I could overlook the tax, and trim a little from the bill.. LOL, he said, "I'll be right back!!! The bill was about $1,100.00 before tax, so I chopped it to an even 1G.. That made him even happier!! Made me feel good too!! The workorder went into the shredder, and a handshake sealed the deal.. He's still roarin happily down the road!!!
When I charter for steelhead/salmon fishing, I charge $300 per person per day, $400 if I have to hike in, CASH!!! That money dissappears as well!!! Just love those greenbacks!!!
RC
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what about stuff like bartercard and currency alternative would you class them as underground economy?
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If you already participate, how so? And any Ideas that would further this movement
would be very interesting to hear...
(If you already do, and don't really want to talk about it, I understand!!!)
But give a thumbs up, to show your feelings about it...
My mother is cleaning her accountant's mother's home in exchange for her doing her taxes.