|[Ben]:||Brilliant idea! ||Discuss This [0 comments so far] View Comments|
|Good as Gold|
The link above leads to an article which tells the story of a businessman who decided to pay his employees in gold coins rather than paper money. Since he used gold coins minted by the US government which are considered legal tender, the employees reported their income for tax purposes based on the face-value of the coins.
Someone who received a $50.00 gold coin could then sell the coin for over $800.00 (as of this writing) but since they were paid only $50.00 by their employer, fall well below the reporting requirements and thus paid little to no income tax.
What a fascinating situation. On the one hand they are accurately reporting the legal value of their income, but on the other they are actually receiving 16 times as much in practical value.
Needless to say the IRS wasn't happy about this and pressed charges. The jury gave not-guilty verdicts on many of the charges and couldn't decide on the rest resulting in a mistrial. The IRS isn't yet sure about whether or not to pursue the case.
If someone paid you in gold and silver coins that were legal tender, how would you expect to report your income - the legal, face value or the actual value on the open market?