Would you do so if you had the option? The article states the IRS will be taking it on the chin so that would make me a candidate! http://articles.boston.com/2012-02-09/news/31042755_1_silver-coins-paper-dollars-silver-dollars
Well, despite what the Federal Reserve Bank would like you to believe, the US Constitution still mandates that: No State shall ... make any Thing but gold and silver Coin a Tender in Payment of Debts; ... U.S. Constitution - Article 1 Section 10
I don't think the IRS would be taking it on the chin. Social Security might but since once you convert the silver back into cash you would have to report that as income you would find yourself with the same or higher income and insufficient withholding. So your tax bill will be higher and possibly with penalties for not withholding enough. (and if you don't report it then charges of tax evaision. They may also decide that if you are accepting silver in wages you will have to pay your taxes in silver as well....all your taxes, and how about the face value of the taxes in face value in silver? Believe me the government will get their pound of flesh. That's OK the States didn't, the Federal government did.
I agree with Conder. Its an idiot idea by a man who simply is ignorant of tax law. The reporter did make mention of it in the article, but to me didn't press the issue. Bottom line, you can do it but must report the fair market value of the silver, so therefor not one penny is saved from the tax man. If the IRS gets one red cent less from this arrangement, its tax evasion already ruled frivolous and the IRS will come in with enforcement personnel. Interesting the quote from the State tax official. I am betting either he is misquoted or was not given the full details of the idea. Bottom line, if a person gets $1000 a week, whether in bills or $1000 worth of silver, he owes taxes on $1000 of income. Face value denominations on the coins are meaningless. If this were not the case, everyone in the US would want to be paid in 1916d mercury dimes, right?
I would get a chuckle if these folks sold their silver and had to pay taxes at long-term capital gains rates when their ordinary income rate might be lower. I think these folks are seriously confused if they think this trick is going to go un-noticed by the Feds. Dave
Especially since the amount of silver being given is based on a conversion to make up for the full salary value, it's plainly obvious that the intended value of the silver is not the $14 face value, but rather the $500. Plus, like already said, whe you converted those silver dollar to cash, you'd at the very least have to pay income tax on the gain, so you contribute less to social security, have to pay income tax anyway, and might get in tax evasion trouble. Maybe the IRS would suggest you pay your income tax in face-value silver dollars?
Those were the days, I went to work Jan. 1955 at the Rohr plant in Chula Vista. Unfortunately it was a year to late, and the pay out was dollar for dollar. The year was 1954, and Fred Rohr felt people needed to be reminded of how important aerospace behemoth Rohr Industries was to Chula Vista's economic health. So for one pay period, the company founder converted his entire payroll into 12 tons of silver dollars. Town merchants had to put buckets under their cash registers to handle the excess coins, according to records at the Chula Vista Heritage Museum. That was then, when Rohr's bayfront plant employed 9,000 – nearly one-third of Chula Vista's population of 30,000 – and accounted for 27 percent of the city's tax revenue.
Yeah, those ideas were common. There are tons of numismatic items with stickers or stamped that it was part of the payroll from a certain local business. I myself did this for a bonus payment to employees at a place I worked one time. They gave out $21 to evryone for celebration of some goal, and I ordered $2 bills and Ikes to pay them out with. I never marked them though.
That was tried by Mr. Kahre. http://www.lasvegassun.com/news/2009/nov/17/businessman-robert-kahre-sentenced-tax-fraud-schem He is currently serving a 15-year sentence... Edit: that is the case being referred to on page two. From what I can see, it is the same as what is being proposed.
If anyone ever found a way for this idea to fly and it caught on you would very quickly find the face value stamped on US bullion to jump to near or even over reasonable market value. The government will never stand for taking a loss Richard
I would first assume that if you are paid in silver, your witholding will be in silver. Once you convert to paper, you would then owe capital gains on the balance. So in effect you may have a slightly lower tax bracket but pay capitol gains on what would be your take home salary. At that point I think the IRS would love you.
Tax is based on the fair market value of your income. This proposal makes about as much sense as asking for your salary in bananas, and then mailing the banana peels to the IRS. It has a pretty major additional flaw. If the city is forced to buy ASE's at market values and sell them to employees for $35 apiece, that's going to punch a big hole in the budget.
