IRS is now sending letters to try and scare and trick people into
responding or reporting cryptos when they are not reportable. It’s a
form letter, Form 6174 titled “Reporting Virtual Currency
Transactions”. This is nothing but a sales letter.
begins with, “We have information that you have or had one or
more accounts containing virtual currency…”. This is a lie;
if the IRS received such information you would have received a 1099,
a copy of the one reported to the IRS.
It goes on to say “… if you believe you didn’t accurately report your virtual currency … you should file amended returns…”
don’t have to read any further because this letter requires NO
response whatsoever and if you want to discuss it with your
accountant, he or she will try and scare you into reporting something
that is not subject to reporting at all. If you get this letter,
ignore it. The only communication that is important is the 1099
form, and we’ve already proven the correct response to the
erroneous 1099 reports in the December 2018 article further back in
the late nineties I began “re-organizing” assets and income for
people and small businesses having both large debt and large windfall
situations. Referring to myself as “I”, is just for convenience,
and many of you know my organization as Singleton Press, PMA (a
private membership association). These strategies were part of
various solutions that allowed people to protect what they had and
prevent future losses from unfair collections while they were able to
scale up the income of their businesses and investments. I’ve been
organizing structures inside the United States (including what we
believe to be the fifty states) in a way that legally avoids not only
tax consequences, but attachments resulting from tax and judgment
lien levies against income, real estate and cash in the bank. The
many versions of these structures I’ve referred to as “Bullet
Proof Banking”, all registered within the United States. In spite
of new laws and banking policies that act as if we are involved in
money laundering or some kind of trafficking, when in fact it is the
banking system that is involved in these very crimes, these
strategies are absolutely sufficient to accomplish the objectives
intended for the benefit of each of our members. These strategies
have withstood all of the new statutes, including even the Patriot
Act and the National Defense Authorization Act and even the new
banking policies that we now know as “Know Your Customer (KYC)”
and “Anti-Money Laundering (AML) or
The Bullet Proof Banking strategies continue to protect people
against these draconian policies and statutes; however, if you want
to get into securities, developing land, business credit, trades,
professions, brick & mortar businesses and raising capital, it
becomes a little arduous.
Many of our resources have been shared with members so that they could begin or develop a business or new source of income. Some of our members just needed to supplement a pension because their investments were raided by the IRS, and some of our members simply wanted to start a new venture or expand into new market niches. Over the years we’ve developed business plans, resources and shared suppliers and some trade secrets, when not restricted, for the purpose of helping people and small businesses succeed.
My purpose in writing this article is to show you how to become a national and change your own political affiliation so that you can have real access to your money and the assets that enrich your lives and allow you to advance technology for the benefit of people and of course, profit.
If you reside in the United Kingdom, Canada, Australia, New Zealand, India or Belgium, we can use the PMA along with the limited partnership or a limited liability company to get the same or very similar results as we have in the states.
I want to introduce each of you, and new members, to a very real opportunity to further support what we’ve accomplished over the years, and to enable those of you who wish to gain the most from possibly tens or even hundreds of millions of dollars realized from investing in crypto-graphic currency. You will want to manage your new assets completely beyond the purview of state and federal taxation and regulatory impediments, including the securities statutes and unjust financial crimes presumptions. The most certain way to do this is to change your affiliation and national status and the following article is the real deal.
A Brief History
the last twenty years I’ve been observing the re-establishment of
a nation (our nation). I did not realize until recently that I had
been witnessing the emergence of a nation that had been marginalized
since the thirteen American colonies became states. The United
States of America was created under The Articles of Confederation in
1781, with the final adoption by the State of Maryland on March 1,
remember in school, and I attended public school in the seventies and
eighties, the false history that the U.S. Constitution was amended
and replaced the Articles of Confederation for a stronger central
government. This of course was a lie since a quorum to amend the
Articles was never reached. Instead, people who were not in public
office at the time, formed a franchise of the East India Trading
Company, giving it the name “United States”, its charter being
the U.S. Constitution. This company (not country) adopted the
standard trademark of the East India Trading Company, a symbol we
have come to know as the American flag, the “red, white and blue”.
fact seems so outrageous that most people will not believe it, but
the research will establish, without question, that the United States
is nothing but a corporation, by its own admission in case law,
historical documents and its by-laws (the United States Code). The
United States is not a government, it’s nothing more than a
collection of thousands of private membership associations (PMAs).
This includes the so-called courts, sheriff, police, “government”
agencies, departments, and every city, town and county is its own
private company, privately held by private interests. The voting
system is a sham, none of the so-called elected office holders are
ever elected by the voters, they are appointed by the same people in
those private membership associations.
we dare speak of these facts openly, those running this racket may
label us a “sovereign citizen”, another word for “domestic
terrorist”, and thereby a possible death sentence at any routine
traffic stop. Labeling someone a “sovereign citizen” is nothing
but a death threat and at least one human rights violation (e.g.
addition to this, these very cities have been captured by other
private organizations that are now perpetuating the ideas of
“sustainable” or “strong” or “resilient” cities. This is
code for a communist dictatorship under a foreign monarch, known as
the Pope. And because people don’t usually think critically these
days and lack the ability or willingness to research anything for
themselves, they will not understand what is intended here. We can
see some of the results of these plans by observing that we are under
total and perpetual surveillance and under the attack of military
weapons systems, including but not limited to microwave towers, Wi-Fi
routers everywhere and SMART meters.
has this happened you may ask? It’s nothing new, you can see
this has been happening for over a thousand years, it’s described
in Book I of the Law of Nations. The secret societies were in
a position to monopolize our government for their own commercial
gains, namely, it was the Free Masons, operating through the Vatican
(Pope), The King of The Netherlands and The Equestrian Order of the
Holy Sepulchre of Jerusalem and the university system in the United
States, the most prominent ones being Georgetown and George
Washington Universities. Georgetown University, the trade name of
Georgetown College, is literally the seat of government for the
District of Columbia.
Declaration of Independence and the U.S. Constitution do not involve
people living today. These documents are not the source of peoples’
rights or protecting the rights of any people. This entire system is
operating under the Law of Nations and most of what is taking place
is in violation of the Law of Nations and in violation of the
Universal Declaration of Human Rights. Please search these two terms
on the Internet with the term “PDF” to obtain free copies and
begin reading for yourself. Is it any wonder that we were never
introduced to these bodies of law? It’s time we begin to learn.
going to have to give yourself some more time to discover the
supporting facts of this saga, it’s too much information to get
into for this short article, and I only wanted to introduce you to a
solution to many of the problems you are experiencing. Let’s
consider some of the major ones
trafficking and trafficking of persons
public schools intruding into our families (surveillance,
courts and government agencies intruding into our families,
to take on long-term debt just to get the basic needs for living,
tricked into taking on long term debt for a fake education,
and federal taxes and regulations,
is a suspect in money laundering and domestic terrorism
and intrusive surveillance
taxed by foreign agents (“judges”) for the exercise of intangible
excluded from society because of your credit rating
The list is quite lengthy but these are the most important items that can be eliminated by correcting your legal status. I’m going to explain what is meant by this term.
Since you were assigned a social security number and since you assigned your children a social security number, each of you have been trafficked out of your home state, one of the States of the Union (The United States of America), and thereby denied any national status. You have never signed a social compact and joined a political party (today’s so-called political parties are nothing but “527” organizations under 26 U.S.C. §527, not political parties). True political parties are not registered with any government agency. The Democrats and Republicans are not political parties, they are tax exempt organizations.
Your “person” has been trafficked out of the state in which you were born and into the United States as the property or surety of the debts for one or more internal revenue trusts situated in the U.S. Virgin Islands, Common Wealth of Puerto Rico, Guam, or the American Samoa or some other federal territory. This made you a resident alien and an enemy of the state in which you live. Since then you have been living as an enemy of the state and described as such under The Trading With the Enemy Act as amended on March 6th 1933 by Franklin Delano Roosevelt (see Title 5 U.S.C. §552(a) “Government Reorganization Plan)
This is why your children can be taken, why your votes don’t count, why you are censored and under surveillance and the reason why you are being taxed and regulated out of existence. This structure has prevented good people from consolidating capital that was intended for the benefit of people, such as to advance certain technologies. Whenever the banking system sees that someone is consolidating capital, the money and property is seized and the Securities and Exchange Commission, or the IRS or Financial Crimes Network (FINCEN) gets involved. The victims naively ask attorneys for help and the attorneys, who are working for this system and against people, take the matter into bankruptcy court and the property is then stolen by the very people who are preventing the consolidation of capital. It’s not only about taking your money, it’s about preventing you from having money or resources, at whatever cost is needed.
Are you really tired of this system? Here’s why you are being abused, because you don’t have a nation, you are a citizen of a corporation, you have no country, no political affiliation. The remedy is to change your affiliation and become a national, specifically, an American National, join your State Assembly, take a real oath and sign a compact with people in your nation. Once you’ve done these basic things, you will have removed yourself from the U.S. system of taxation, regulation, abuse and exploitation.
The first step is to declare your residency. First, using your home address, you obtain the latitude and longitude for your home address at https://www.latlong.net/convert-address-to-lat-long.html and then convert these coordinates into the natural area code (NAC) using http://nactag.info/map.asp. The NAC coordinates will look like a series of capital letters and numbers. The postal system will deliver mail to this address, even though you may encounter some resistance or interference, all existing postal systems use the same software which does include the NAC database. This has been adopted by the Universal Postal Union around the world. Send yourself some post cards with this address until you begin receiving them on a regular basis. This will be the first step to getting you out of the U.S. jurisdiction. Before you begin, please have patience, realize this takes time, and be sure to watch and take notes from the 103rd Broadcast of the T-ROH Show.
you have this information, visit the website for The United States of
America at https://theunitedstatesofamerica1781.com/
The first thing you’ll want
to do is the declaration of
residency from the link on the main site:
the name that appears on your birth certificate, and it will result
in your legal name being published, and your trafficked person will
be returned to the state. The bonds will then collapse, and you’ll
want to order the service to take the oaths and that is a 90-120 day
process of collecting records. Once that is done, you can take the
oaths and then you can get your passport and give up your state
driver license and vehicle registration in exchange for the only real
identifying records that will not be used to traffic your person or
tax you or hold you as a surety. You will then be able to register
your car in The United States of America (States of the Union) and
export your land (home) into the States of the Union.
will also want to join the American National Union once you register
the existence of your name as a business, such as a limited liability
company or a private membership association (PMA). This is the main
and there are unions for every trade and profession. Join the
discussions and please take time to learn more about the PMA at
As a quick example, your family is a private membership association
and no government or police power has any authority to intrude into
your PMA unless it is engaged in acts considered to be substantively
evil. Knowledge of this one item alone would be enough to stop
most of the family court abuses.
and fathers don’t realize that the term “neglect” is being used
in these family court proceedings without any set of facts, nor any
set of facts established with evidence of any kind. Moreover, the
set of facts that is not disclosed, involves the presumption that you
are involved in money laundering. Yes, family court accusations of
“neglect” involve the judges taking silent judicial notice of the
mother and father being involve in money laundering. This is why no
matter what your argue, it will have no effect on whatever the
court want to do with your children, and your attorney is helping the
court and the state. You will discover how this is done as you begin
to learn more about what I’m explaining in this article.
want to begin learning about the Bank of North America and the
Continental Dollar (UCD) and the Continental Public Bank at
This bank is approximately 240 years old and its currency is pegged
to silver bullion in a 1 to 1 ratio, that is, 1 UCD : 1 oz. Ag
pension program of The United States of America can also replace your
U.S. based social security pension, you will have to research to
learn more about this. Once an American National, you can join its
military and run for public office, a real public office where the
voters’ votes really do result in a real office holder being
elected to serve the people.
the other hand, The United States of America includes all of the 50
states with which we are so familiar.
an American National is not intended to solve your tax or court
problems. If you decide to become an American National, you will
want to do it for the purpose of changing your affiliations and
enjoying the benefits of being part of a nation, and not for the
purpose of solving problems related to a debt collection or court
the American National status will end your own human trafficking and
the trafficking of your person and free up your access to money and
the enjoyment of property. It will remove your person from the
purview of the United States and all of its agencies, such as the
Securities and Exchange Commission, IRS, state agencies, etc. You
will have new obligations, but they will be fair and lead to your
will certainly want to re-mediate yourself to compensate for all of
the propaganda you’ve been surrounded with for an entire life-time.
Please watch/listen to The T-ROH Show by searching the Youtube.com
channel “The Government of The United States of America” and the
phrase “The nth Broadast of The T-ROH Show” and replace “nth”
with “first”, “second”, “third”, “fourth”, etcetera.
There are over two years of weekly T-ROH shows and you will want to
hear all of them, from the first to the last.
organizing your investment company or business outside of the United
States, and within The United States of America. Once you become an
American National sign the social compact, take your oath and join
your State Assembly, you may conduct your business and lawfully
managing your investments in The United States of America and outside
the United States while avoiding all of its unjust taxes and
regulations. This fact alone may be a decision maker for many of
you, but as you learn more about this, you will discover many more
reasons to change (or correct/restore) your affiliation.
of us are anticipating substantial windfalls on this next
crypto-rally near August and September, and we have a need to take
short term profits, but not with $20,000. Many of us need a way to
manage $10,000,000 or more. It’s easy enough to go into a stable
coin, but the adage of never put all your eggs in
one basket is foretelling. I’ve described a few options here,
many of which I’ve used over the years for different reasons,
basically to move large amounts of money and valuables between
if you want to source hundreds of thousands of Bitcoins, or the
equivalent, in currency, precious metals or even loose diamonds, or
move from your large currency position into another other asset, and
move money across different jurisdictions, I do have a turn-key
solution and it’s time tested, insured by the world’s largest
re-insurers, including tier 1 escrow, allocated vaults,
multi-currency accounts and insurance for your crypto-currency
holdings. Simply send an email to email@example.com
and in the subject line include the phrase “special treatment”.
Do not include financial information, but maybe a general description
of what you need.
can we temporarily take profits for the short term and get back into
our crypto-graphic assets, without pooling all of our windfall into
one place while staying liquid enough to get back in quickly? You
want to stay liquid but get out of your crypto-assets while the price
drops, and then quickly buy back in as the price continues to rise.
You want to avoid having your money frozen and being accused of money
laundering or something similar.
biggest risk in these situations is the government and banking
institutions. There has always been a hidden motive to prevent
people like us, who are not “in the club” with the elite, from
consolidating substantial capital. Now with the onerous anti-money
laundering and terrorist laws and policies, it’s just easy enough
for any bank to seize your money and impose conditions on you to
prove its origin before gaining access again. The banks and
regulators actually have a profit motive for this. How then do we
stay liquid while avoiding falling crypto prices and keeping our
short-term profits, so we can get back into the assets as the prices
begin to rise again?
criteria include moving into a stable coin, one or more, with a
secured exchange, application or other device. The strategy may also
include getting into cash, preferably away from any financial
institution, but you should be okay using a financial institution as
I’ll explain. And moving your crypto value into precious metals,
most practically in vault services that deal in crypto-currency
themselves. We have several options. Keep in mind that you want to
move from cryptos into something that is liquid, and that is not
manipulated anywhere near a 1:1 ratio as your crypto-coins may be,
it’s a tricky process to navigate.
There are several strategies, most
involve using a reliable stable coin, a crypto-currency pegged to
fiat. The top three are mentioned here, but keep in mind, the
strategy is to avoid volatility while retaining liquidity. This can
be done with cash, precious metals, commodities and stable coins.
coins are one way to take profits without going into your fiat
currency, and stay liquid for the purpose of buying back into cryptos
when there are substantial price drops. This also allows you to
avoid any financial institution. Here are the three most reliable
stable coins in the crypto world.
(TUSD) is likely the most reliable “stable coin”.
TrueUSD provides its token holders regular attestations of escrowed
balances, full collateral, and also the legal protection against
misappropriating underlying USD. It is regulated and independent of
the exchange marketplace while backed (exchangeable) 1 to 1 with U.S.
Dollars issued by trust token. Unlike USDT, TrueUSD (TrustToken.com)
does not hide anything from users. It’s bank account holding
proofs is published each month. All funds equivalent to TUSD are
stored in professional trust firms’ banks. In addition, TrueUSD
never touches those funds. Another good thing is that users can
directly exchange TUSD with USD without even using any exchange. It
only requires your typical “Know Your Customer / Anti-Money
purchase and redemption process is completely handled by TrustToken
Smart Contract, in case you are not using any exchange service. Many
people believe that TUSD is far better than Tether in terms of safety
and legal protection. You can decide for yourself, but these are the
recommended exchanges for TrueUSD: Bittrex, Binance, Huobi, Okex,
Kucoin and Cryptopia.
second recommendation for a stable coin is the GEMINI Dollar.
“GUSD” as it’s abbreviated, is another trusted stable coin
issued by Gemini Trust Company, LLC, a New York trust company. Gemini
Dollars, equivalent to U.S. Dollars are at State Street Bank and
Trust Company. Proof of funds in banks account are examined by BPM,
LLP, a registered public accounting firm, in order to verify the 1:1
peg. GUSD is the safest coin as it comes under U.S. regulators. I
don’t trust any regulators, but at least we have a good idea of the
organizations and people with whom we are dealing. These are the
preferred (most popular) exchanges: Okex, Okcoin, DigiFinex, and
third stable coin that is recommended includes USDC. It
is a regulated stable coin backed by the U.S. dollar. All USDC are
issued by Circle Internet Financial Limited. The USDC equivalent U.S.
dollar is deposited with its accredited bank partners account after
that it issues the tokens for circulation. This is an ERC-20 token,
and the token can be stored on a trust wallet, Ledger, BitFi
or other hardware wallet. Recommended exchanges include: Poloneix,
OKEX, DigiFinex, CoinEX, and Kucoin.
are more stable coins available in the market but those are not very
popular and listed in only a few exchanges that are not trusted as
well as having very low volume. Currently, USDT is the only stable
coin which listed in almost all crypto-currency exchanges in the
world. But, due to the recent crash of USDT, it’s not as trust
worthy as the three I’ve mentioned.
between any money and precious metals does not always give you the
liquidity you might require, except that some very reliable vault
services and exchanges implement the use of cryptos with the vault
storage of precious metals. You need to be able to buy and sell with
at least one reliable crypto-coin, and have your holdings stored in a
vault that can be sold any time via your crypto-coin.
Uphold to store your cash in 23 different currencies, any of four
precious metals (gold, silver, palladium and platinum) and two of the
stable coins. You can link your wallet to your bank account or debit
card. This service includes instant conversion and seamless exchange
between major digital and fiat currencies. Transact with any wallet
on seven crypto networks.
most important aspect of buying precious metals to get out of
crypto-currencies, is that the metals must be stored in the custody
of the exchange in order to have the liquidity needed, and you should
be able to exchange back into your crypto-currency just as easily.
both cash and bullion on your account! This enables you to trade in
and out of positions at your convenience.
a BullionStar account holder, you are able to keep funds on your
BullionStar account in Singapore Dollars, US Dollars and Euros. Funds
on your BullionStar account can be used towards purchases of bullion
or be withdrawn anytime.
holders who are thinking of diversifying or taking some profits on
their Bitcoin positions may be interested to know that in addition to
transacting in US Dollars, Singapore Dollars, and Euros, BullionStar
also accepts Bitcoin as a payment option for its precious metals
products, and has done so since May 2014.
the BullionStar website, customers can quickly and efficiently
purchase gold bars and gold coins, as well as silver bars and silver
coins using Bitcoin. Customers can also sell gold and sell silver to
BullionStar and receive settlement proceeds in Bitcoin.
maximum transaction size for a purchase order using Bitcoin is
currently set by BullionStar at BTC 200 per transaction. There is no
minimum transaction size for a purchase order using Bitcoin. For sell
orders that settle in Bitcoin, the standard maximum transaction size
is currently 30 BTC per transaction, but this can be higher upon
discussion with BullionStar.
is another platform for purchasing Gold with Bitcoin (and vice-versa)
effectively and within seconds. The beauty of the Vaultoro platform
is that it gives investors the power to instantly exchange between
two of the world’s most popular Alternative Assets, which can
protect you against inflation and volatility. Watch these
introductory videos about using Vaultoro,
you can store cash (fiat) at BullionStar and Uphold, Caleb &
Brown in Australia has additional solutions.
Australian firm provides the best of both worlds. This is not a
banking institution but it can store your cash and crypto-graphic
currency and it does provide services much like a brokerage firm. I
like this very much, especially for U.S. Citizens, because there is
no reporting obligation for Caleb & Brown nor for U.S. Citizens
on Form 5471 for the reason that clients are not account holders at
any financial institution and have no interest in any foreign
corporation, and there is no duty to report on their investment
activities. It leaves all reporting, if there is to be any, in the
hands of the client. You can establish a personal or business (e.g.
LLC) account with Caleb & Brown, and it’s not a bank account,
and it’s not ownership in any foreign corporation, nor are you a
signer on a foreign account.
my opinion, the best way to get involved with Caleb & Brown is to
join Crypto Jay’s Trade Calls. He is an institutional trader, his
website is at https://www.cryptotradecalls.com
and you can receive daily charting and get the best forecasting you
can find. You may also want to get in on special announcements about
imminent trends in crypto pricing at
The patreons get to know which trades that Crypto Jay gets into and
out of, what his target are, and the reasons. A typical exit usually
produces 1,500 to 2,000% return because these are trades lasting six
months to a year.
can take profits and move them into cash, or you can transfer from
one wallet address to another, or you can use qualified escrow to
move the value of your crypto-currency into other assets anywhere
around the world. There is no need to wire transfer funds to other
countries. The key feature in these services is that you can move
from your crypto coins into another asset such as precious metals
without first converting to cash and without using the bank wire
you might wire money to open your account at Caleb & Brown, or
simply transfer from one wallet to a wallet in its custody (Caleb &
Brown), you will not need to wire transfer profits in cash anywhere.
You can simply move from your wallet at Caleb & Brown to another
wallet, for example, at an exchange in your country, and then sell
for local cash. If you’re in the states, simply move from your
Bitcoin wallet “in Australia” to your Bitcoin wallet access in
your exchange account in the states, and then sell for cash. There
is no need for a wire transfer. And if you are doing a very large
transaction, such as trading your coins for other assets such as real
estate, you can use qualified escrow.
Schiff has been brought into the crypto-currency sphere kicking and
screaming, but we still respect him. He manages a precious metals
vault service that can be accessed via crypto-graphic currency, much
you can choose from currencies, commodities, stocks, derivatives, and
more to diversify your portfolio. I don’t believe it provides
vault storage services such as for precious metals, but then base
metals and other commodities are not typically stored in vaults.
You’ll have to gauge your own risk tolerance.
the right time you take profits with the intention to get out
temporarily and back into your crypto holdings within about 90 days,
you want to move the value of your cryptos into something that is
mostly if not totally out of the banking system, but something that
will allow you to get back into your cryptos quickly, including
stable coins, cash, precious metals in vaults that are accessible via
Bitcoin. I would like to see more ways to exchange my cryptos for
base metals, such as copper, in the same way there is for precious
metals. Traders Home may be one of the services I have found, but
I’m still looking for more.
stable coin that is reliable and not manipulated in same pattern as
2) Cash or currency outside of the banking
system, such as in a vault.
be able to buy and sell using crypto-coins, or at least cash and
wire transfers of currency
research shows that all of these solutions may require “know your
customer” and anti-money laundering disclosures from signers of
account holders, they also allow account holders to be businesses
such as limited liability companies and limited partnerships. In
some isolated cases, you may not need to use a company as an account
holder, but most of the time it will be to your advantage, not just
for tax purposes and estate planning, but for managing other types of
risk normally associated with large amounts of money.
Did you know that transactions between crypto-currencies are not re-portable by the exchanges in which they are held. The 1099-K is deliberately erroneous so that people will mistakenly include the information on their Form 1040 and then be subject to paying taxes on property that was not subject to the tax. It’s not because of a law, it’s because of how people are mistakenly reporting information on their 1040 that creates the tax situation. The Secretary of the Treasury confirms that trading between crypto-coins is not taxable.
There is no income tax between crypo-graphic currency exchanges; however,the IRS is mis-applying the “backup withholding” provisions under 26 U.S.C. §3406 to force the exchanges to sell 31% of the dollar value of your crypto holdings and pay it to the IRS unless you request a determination letter and file a current W-9 Certification. This is specific to personal accounts at the exchanges, not business accounts such as LLCs that do not file returns.
Why do you request a determination letter? Because backup withholding applies only to “re-portable payments”. Re-portable payments are only payments of interest or dividends in U.S. Dollars. Trading between crypto-currencies has nothing to do with receiving payments from interest or dividends. The IRS is doing this to escape the normal tax assessment procedures that would allow people to scrutinize what is being done and you will not find any accountant or attorney who understands this well enough to correct it.
How do you request a determination letter? You must request a determination from the Secretary and it must be in a particular format as described in the most recent IRS Revenue Procedures Manual. I’m not trying to be cryptic here, but the language of the request is fairly technical and specific to 26 U.S.C. §3406 and 26 C.F.R. §31.3406(a)-1. I’ve used this process for nearly 20 years and it is very effective.
This works whether or not you are using the limited liability company and Blockchain Tax Immunity Trust or not. Everyone who is filing a 1040 and receives a 1099-K reported in his or her name and his or her social security number or EIN can use this process to eliminate any taxes resulting from the amounts reported on the 1099-K. One request will need to be made with regard to each 1099-K.
This needs to be corrected immediately, do not try to use the falling prices of crypto-currencies to claim losses with the IRS because you will be on the hook for taxes as the currencies increase in price against the dollar. Don’t play this game, correct it now or it could cost you tens if not hundreds of thousands of dollars.
When people begin receiving 1099-K forms from their crypto-exchange accounts, for crypto trades that did not involve selling cryptos for dollars, all hell is going to break lose. They will probably, and mistakenly, report the information on their tax returns because they don’t know any better, or ask a CPA or attorney for advice, who will mistakenly tell them to report the amounts on their tax returns. This report pertains only to people who have personal accounts on the crypto-exchanges, and does not apply to tax deferred limited liability companies and those using the Blockchain Tax Immunity Trust.
There is no tax liability for trading crypto-currencies for other crypto-currencies; however, if you can be tricked into reporting what you believe to be taxable income on your tax return, then it becomes taxable.
If you want to keep your money, and legally avoid the taxes, you must EXclude the 1099-K information from your tax return and send the exchange an updated Form W-9 certifying the correctness of your social security number and that you are not subject to backup withholding for the most recent tax period. Additionally, you must request a determination letter from the Secretary regarding the issue of backup withholding. This is where almost no tax professional will understand what to do, including attorneys.
You must have filed your tax return for the same period, and filed a current Form W-9 with the exchange, retaining a copy for yourself and have kept a copy of the Form 1099-K from each exchange. These documents must be sent to the Secretary of the Treasury, to each of three mailing addresses, via certified mail, along with a properly written request for determination letter. You cannot simply send a letter to the IRS or to the exchange claiming that the Form 1099-K is incorrect, this will be ignored. You must use the proper administrative procedure, as published by the IRS, and request a determination as to backup withholding. This will allow you to exclude the Form 1099-K data from your tax return, minus the amounts of cash you took in your own name.
Please follow this blog for updates and information. You should expect a Form 1099-K from each exchange before January 31, 2019; and in response, you will need to prepare and send one request for determination letter for each.
The following is the legal analysis for the reason why no taxes are owed, but I must caution you that simply using this analysis in some kind of protest letter will do nothing, it must be part of a six-page request for determination letter as instructed within the Internal Revenue Bulletin.
STATEMENT OF LAW: The law is certain and unambiguous. Please be advised that 26 C.F.R. §1.1471-1through 7 is defined as: “Reportable payment” to mean,“The term reportable payment means a payment of interest or dividends (as defined in section 3406(b)(2)) and other reportable payments (as defined in section 3406(b)(3)).”
ANALYSIS: The 1099-K incorrectly reports dollar amounts that were not remitted or distributed to the payee as stated on the form. The payor has retained ownership of the underlying property (amounts erroneously reported as payments in dollars on Form 1099-K) and never dispersed any payments to the payee, other than those reported on the payee’s filed tax form or statement (i.e. Form 1040). The “taxpayer”herein was not the “payee” of any interest, dividends or other re-portable amounts identified under 26 U.S.C. §3406(b)(3). Additionally, the dollar amounts erroneously stated on the disputed Form 1099-K do not represent dollars paid to the payee (settled transactions) and do not identify any amounts of interest or dividends paid to the payee and therefore, are not subject to backup withholding.
Specifically,“other re-portable payments” as they relate to this transaction,are identified in 26 C.F.R. §31.3406(b)(3)-5(a)“Payment card and third party network transactions subject to backup withholding.”
26 U.S. Code § 6050W(c) identifies a “reportable payment transaction”to mean “any payment card transaction and any third party network transaction”, and as it pertains to the transaction herein, Form 1099-K, “The term third party network transaction means any transaction which is settled through a third party payment network.” Assuming for a moment that the reporting party (payor) is a third party payment network, the dollar amounts stated on the pertinent Form 1099-K were never “settled transactions” within the meaning of the regulation and the dollar amounts stated on the Form 1099-K are incorrect. No payments were made to the “payee” as erroneously stated on the disputed Form 1099-K.
CONCLUSION: I am not subject to backup withholding for the period ending December 31,2018.
Imagine for a moment that we had a taxing framework and did impose taxes upon the use and ownership of crypto-graphic currency. As all income tax systems operate, anywhere in the world, the taxpayer is the owner of the thing being taxed. We all understand very well that if we don’t own it, we don’t owe taxes on it. Even sales taxes are imposed upon retailers, not the actual customer. Itemizing the business expense of sales taxes on your receipt is a trick to make it appear as if the customer is paying the sales tax when in fact it is the retailer. The same is true of crypto-graphic currency. The owner of the currency in a central exchange such as Coinbase, is the taxpayer. If you don’t already know how the software for crypto-graphic currency functions, there is a blockchain, a ledger that keeps track of all transactions, a “mining” operation which is software that produces the units of currency or tokens through mathematical calculations, and then we have the actual unit of the currency, the “coins” that are held in wallets, individual databases where this data is stored for use. The individual units of the currency are controlled by keys, or lengthy codes that come in two parts. One part is the public key that allows anyone to see the value of the wallet or key and then the private key which is only known by the owner of the wallet or coin and which is used to “spend” or transfer the currency. The owner of the private key of a crypto-graphic currency is the owner of the currency.
In the case of central exchanges, the exchange is the owner of all of the private keys. Even if some tax was imposed on exchanges between currencies, the taxpayer would be the owner, or the central exchange, not the user such as the account holder, or the exchange customer (people using the exchange). This tells the whole story, and all the misleading news articles just play upon our lack of knowledge.
In the situation where the exchange owns the private keys for your wallet, we have a trust relationship. The customer is the grantor and the exchange is the trustee who owes the private keys back to the grantor on demand. The trust collapses at the point that the currency is transferred away from the exchange and into private keys held by the customer. The way to have this properly recognized, for example in a tax audit, is to declare the existence of the trust within a written declaration of trust.
Lacking this understanding, you’re probably setting yourself up to pay way too much in taxes from crypto exchanges because of all the misleading statements in recent articles published by mainstream periodicals and their attorneys. There has to be a specific taxing statute, and taxable activity and rate in the statute, and then the agency must have promulgated a regulation to implement this specific taxing statute.
Because people don’t understand the law, they report items that are not required to be reported and because the tax return is signed under penalties of perjury, the IRS just accepts that you are telling the truth and what was not taxable before, becomes taxable because it was reported incorrectly. For example, because people don’t read the definitions, nor do tax professionals, they act as though their business is a “trade or business”; however, the statute under Title 26 section 7701 defines “trade or business” as “the performance of the functions of a public office”. If you’re a Congressman, agency employee or federal judge, you’re involved in a taxable trade or business, but if you’re a plumber, you are not.
That is how the system works, and your accountants and attorneys help you make those mistakes. Here is an easy way to understand this one aspect being described in the news lately. It pertains to one word being added to limit the application of “1031 exchanges” to only “real property” and not just any property. If you sold real estate and made a profit, it was taxable unless you bought another similar property within so many days. If you took your taxable profits and bought another “like” property, you qualified for the “1031 exemption”. You went from property to “dollars” back to another like property. There is no such thing as a “crypto-exchange of like cryptos”. Adding the word “real” to the statute did not create a whole new legal framework that now imposes taxes on crypto-currencies of any kind or in any way.
This change simply limits the exemption to “real” property. Property has always been taxable to the extent that a gain is realized by a taxpayer. Here is an example you can ask any tax professional. “Does a taxpayer incur a tax debt when he buys gold, which is property?” “Does a taxpayer have a tax liability if he trades his gold for silver?” Or, “does a taxpayer have a tax liability when he sells his gold for dollars?” What if I exchange my gold bullion for gold coins? It’s the same question, and same answer.
In the cryptographic currency example, going from one crypto to another does not involve first going back into “dollars”, so this is a completely different situation, assuming it’s even taxable in the first place. Stay out of fiat, reinvest, and, even if you would personally have a taxable event, use a tax deferred structure such as an LLC in the states and use its EIN and not your name and SSN and you can defer the fiat tax liability, assuming there will ever be one. It can be deferred forever if you plan it correctly.
Even if there were eventually a taxing statute and regulation imposing a tax in a crypto currency, one or all, how would you pay the tax, in crypto? A taxing statute and its regulation would specifically apply to a taxable activity, and it would specify a rate along with the type, kind or class of tax. There is no such statute or regulation at this time. Even if there were, you could never pay the tax in the crypto-currency. It just isn’t taxable, anymore than words can be taxed, or taxing the use of words, no such thing, and no such tax on cryptos.This tax myth is based upon incorrect premises, read the statutes and regulations. I know that some people have good intentions, but everyone should really do some research first, and don’t just rely on a tax attorney or accountant as those are just agents of the system to get you to buy into the false premises.
True story: In the early nineties, my first debt collection case assigned to me by my partner involved a flower farmer who had spent 35 years building up an incredible seasonal flower farm business. When I got the case, the IRS and bankruptcy trustee were tagging every item in his home, his farm and had taken all of his equipment and vehicles. He only filed bankruptcy because he thought he could deal with the IRS better that way, but it just made it easier for them to take his property. After a few months of collecting facts in the case and corresponding with the IRS and different offices, I discovered that the IRS had been taxing this flower farmer for “manufacturing surface coal mines”. This is actually a crime, so I filed a formal report of my findings to the Federal Bureau of Investigation. It wasn’t 30 days later that my fax machine (remember this was back in the nineties) began spitting out page after page my client was sending, of notices from the IRS, releasing every lien and levy it had and returning all of his property. The IRS vanished and he never had another problem again. That’s when I began to realize what kind of a racket these pirates have been perpetrating. It should make you wonder about cryptos, because I can tell you from additional research I had done following that case, that the IRS is taxing people under Title 27 of the Code of Federal Regulations, for activities involving the manufacture of alcohol, tobacco products and firearms and related industrial activities such as mining.
Don’t be so quick to believe that there is some “new law” or “new rule” just because Forbes published an article with lots of misleading and erroneous conclusions. Adding a word to a statute does not create an entirely new taxing statute, or class of tax. The next thing we’ll probably discover is that the taxing authorities want to tax our brilliant, million-dollar ideas, before we even write them down on paper or make any money with them.