Is Bitcoin property? Is it currency? Does it even matter?

in #bitcoin7 years ago (edited)

With the US government looking for ways to tax and claim jurisdiction over Bitcoin, many questions have been asked, and fewer answered.

Is bitcoin property? Is it currency? How does the IRS justify jurisdiction over it? How does the government justify jurisdiction over the Bitcoins that have not touched any legal entity party to the Uniform Commercial Code, do not exist in a physical jurisdiction, and (when living only in the ‘ether’) have not been subject to engaging in interstate commerce? Do we even have any freedom left?

As a seeker of remedy, I think the questions we really need to be asking lie somewhere between the myopic and the existential.

Having just celebrated an anniversary of the independence of this nation, I’ve decided that in my hunt for remedy I need to take a step back out of the Uniform Commercial Code rabbit hole and set my sights on the Constitution and Bill of Rights.

Before I go on, I will issue the disclaimer that this post is based on my own personal opinions, I am not a lawyer, am not licensed to practice or teach law, I am not a tax accounting professional, none of my words here should be construed as advice, and I am not making any suggestions to how you should or shouldn’t file your taxes – I recommend that you hire licensed legal and accounting professionals when filing your taxes.

The IRS has issued guidance that Bitcoin should be treated as property. In the IRS Notice 2014-21 issued in 2014, the IRS included some authoritative answers on how Bitcoin should be treated for federal tax purposes. It could very easily be concluded that all Americans owning or transacting in Bitcoin must treat Bitcoin as a capital asset and file a capital gain or loss with the IRS when disposing of any Bitcoin.

When I am trying to understand a problem, I try to regularly stop and ask myself, “Are there any assumptions I am making that are incorrect?”

While deep in consideration regarding questions relating to bitcoin, taxation, government, the IRS, jurisdiction, and the Uniform Commercial Code, it occurred to me that I could be making a very big, incorrect assumption.
My assumption was that, if bitcoin falls under the jurisdiction of the US Government, they would have the authority to compel taxes be paid on it. I believe that this assumption may be wrong in many instances and needs to be further explored.

I think some of the questions Americans need to be seeking lawfully and legally admissive clarification on include:

  • To what extent is the ability to earn wages from our labor and own property a common right, as provided for under the Bill of Rights?

  • Can Bitcoin be owned as property as a matter of common right?

  • Can currencies be owned as property as a matter of common right?

  • Under what conditions does earning wages from our labor or owning property become a privilege?

  • Does the Constitution give Congress the authority to compel or require payment of direct unapportioned taxes, tariffs, and excises on wages earned or property owned by common right?

  • What is the definition of ‘income’ as it is used in the 16th Amendment to the Constitution?

  • Does the 16th Amendment apply to wages earned and property owned by common right?

  • What is the explicit definition of ‘personal services’ as used in the IRS definition for ‘gross income’? Is ‘personal services’ synonymous with labor in general including labor engaged in as a matter of common right, or does it only refer to services legally regulated by the government via legislation and exercised as a matter of privilege?

Do you know what a ‘person’ is? Do you really?

The meanings of words matter. The word ‘income’, along with many others, needs to be EXPLICITLY defined, none of this ‘…includes but is not limited to…’ bull&*%!, it needs to be made VERY CLEAR whether ‘income’ includes wages earned and property owned by RIGHT as granted under the Bill of Rights, or whether it is limited to wages earned and property owned by exercise of PRIVILEGE (something that we need permission from the government in order to do / own - labor/business activity and property restricted by legislation and regulations). Is is possible that this lack of provision of EXPLICIT definitions by the IRS could be a violation of the U.C.C. § 1-304 Obligation of Good Faith, or could it become a violation if an appeal for the explicit definitions of terms is requested and unfulfilled? If so, what is the remedy and how is it excercised?

  • Is it lawful to levy a compulsory direct unapportioned tax, tariff or excise on wages earned and property owned by right?

  • If the tax on wages earned and property owned by right is not a direct tax, but an excise tax, is it lawful for the IRS to compel people to pay that tax, or is it VOLUNTARY?

  • If it is voluntary, what actions of an individual can enter them into an obligation to pay these taxes?

This entire line of questioning may seem bizarre or waaay out there in conspiracy theory land to many folks.
And to that, I would like to say…

If you don’t believe there is a conspiracy to abrogate our God given right to life, liberty, and the pursuit of happiness, you are either not paying any attention or are willfully ignorant.

I believe part of the answer to these questions already lies in past Supreme Court cases. Seek and ye shall find. I will not point you in any direction in particular, because the rabbit hole is deep and riddled with half truths, traps, and landmines.

I suspect the legal system might be a ‘legitimate’ means by which we have been ‘captured’ via treacherous trickery and the color of law. It is my opinion that there are legal remedies that exist that are sometimes included in the codes but shrouded, and that these remedies can be exercised through the legal system as a means to restore some of our lost liberties. Remedy seems unlikely to be granted as a defendant, and should probably be sought as a plaintiff. I believe one of the important and ESSENTIAL first steps in unraveling the deceit and trickery may be to get official explicit definition of terms. Is success even possible if you don't know which words are loaded and what the explicit definition of each of these loaded words is? Who is going to seek out and exercise the remedies?

Don't forget to always ask... Am I making any incorrect assumptions? No word is too innocent to be a potential legal landmine.

Copyright © 2017

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So the constitution as we all think should work is not in effect. I say we but I'm not in the USA nor American and certainly not a citizen of the US corporation, thank God. All I know that the English speaking countries are well documented and I wish I knew as much about the country I live in now. So the act of 1871 just axed constitution by declaring it to be property of the US by merely changing the name of the legal document: The Constitution for of the US (corporation). And through your birth certificate the artificial person is created which they trick you in representing. Has the same name but in AllCaps or Diminuo something in latin - look it up. Case matters in legal documents but I'm sure you know.

Yes, I absolutely understand (<---landmine) what you're saying, and I agree with almost all of it. As you mention the Constitution, even that has become 'dualplicitous' in these conjoined parallels of Republic/Corporatocracy. It is not that the (second) Constitution is not in effect, it's that the people are bringing cases under the wrong jurisdiction, identifying themselves the wrong way under the jurisdiction they are under, or when defendant, volunteering to stand under the wrong jurisdiction. Their comprehension of the meanings of words is woefully and dangerously inadequate, and they don't comprehend the different bodies of law and code that the different jurisdictions are operating under. I certainly do salute their efforts though, they have acted as trailblazers forging the path toward understanding.

Okay... so what about the players themselves? Judges wouldn't necessarily be aware that they work for a company...

I am not sure what you mean with this question, could you clarify?

Well, judges just believe in fairytales but think they are representing the real thing. Question is what will happen if they know?

Just buy and hold for a while and see what happens. followed n upvoted

(Recognizing that this would never hold up in court as a legitimate argument) I would argue that there is no such thing in the first place as "ownership" of bitcoin. There is no real sense in which you can "have" bitcoin (aside from Casascius coins, but even then, those are just paper wallets made of metal). You never have anything. There are no "bitcoins" that really exist or represent anything in the real world. Rather, the blockchain keeps track of a bunch of puzzles and associated values, and you have the solutions to some of those puzzles, which (if you so desire) allow you to reassign them to new puzzles.

One could argue that if there are bitcoins associated with a puzzle to which you know the answer, you own those coins (in other words, the ability to spend defines ownership), but that gets messy too. What if multiple people have the ability to spend those coins? They could be locked in a multisig (escrow) or just have a script that multiple people can solve. If I randomly generate a key and find that people have sent money to that key (intended for someone else), do I own that money? (Of course, the probability of doing this is astronomically small, but it could happen.)

Of course, none of this actually addresses the legal questions you're bringing up.

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