"Redeeming Lawful Money"

[Pottapaug1938]

Reading David's idiocy about bats, I could not help thinking how appropriate that was, for someone who is batsh*t crazy.

[wserra]

Every now and then, I look in on Van Pelt's site. I just did that yesterday. In a post from a couple of weeks ago, he writes about a "suitor" who - horror of horrors - had to pay the same commuter tax as everyone else who lives in New Jersey but works in New York. He tries to disguise this person's identity - something I always get a laugh out of. If, as they claim, they're just following the law, why do they need to hide who they are? Anyway, though, Van Pelt not being the sharpest knife in the drawer, it took about ten minutes to figure out who this "suitor" is and pull her filing (Van Peltian nonsense all) from PACER.

Khanna Pugach is a "senior data scientist" with Credit Suisse, where she has worked for several years. She filed $0 2022 returns, claiming that her substantial income was rendered non-taxable due to her "demand for lawful money". Van Pelt posts a redacted page from a New Jersey return on his site that shows this.

It appears that New Jersey was not thrilled with this return - although, according to her, New York accepted it - and sent her a bill for what she owed. She responded by filing something called a "Certificate of Exigent Circumstances Rule B(1)(c)". 23mc291 (NYSD). I have no idea to which of the many Rules B(1)(c) she refers, and she doesn't bother to explain it - probably a good thing. The filing is gibberish anyway, in more ways than just the "redeem" nonsense. For example, it goes into David's delusion that a DJ's oath of office must conform to what he wants or it is "invalid" - and presumably whoever cites that invalidity has a "Get Out of Jail Free" card for a subject of her choice. It claims that, if a state official disagrees with this revealed wisdom, s/he is personally liable to, well, Khanna Pugach for, well, something. No, none of this makes any sense, but we are talking about Van Pelt.

The kicker is that Ms. Pugach does seem to have something on the ball, if only because she makes good money as a professional at a major financial institution. Making her conduct the more puzzling is that Credit Suisse is quite unlikely to appreciate this in an employee. We know that Van Pelt doesn't give a shit about people he gets in trouble - but why doesn't she realize that this is not a good career move? Greed, yes, but she must know that, if she persists, her employer is very likely to learn of this, if only when it receives the wage levy.

I gotta believe that someone in a responsible position with Credit Suisse knows you can't just sprinkle pixie dust on income to make it non-taxable. We've said as much about other generally responsible folks like airline pilots and chiros, who tend to be over-represented amongst tax idiots. While individuals may find themselves in desperate straights, the only general conclusion I see is that greed is indeed a powerful motivator.

[Burnaby49]

A question from a non-local. What is the commuter tax and how much is she evading paying with her idiotic lawful money claim?

[wserra]

Commuter tax: two jurisdictions each have an income tax, and you live in one and work in the other. The theory is that you are using taxpayer-financed services in both jurisdictions, so you should contribute. The tax in the employment jurisdiction is typically a fraction of that in the resident jurisdiction.

How much: well, the tax bill she got from NJ, her state of residence (which she courteously attaches to the filing, above), shows income of $128K, on which NJ is billing her $6K. NY tax on that amount would be about the same for a resident. There is computation involved as to partial credits and the like, which we'd need more info to compute - and which the states are unlikely to compute for her, since she filed a return showing income of $0. Yet another example of someone screwing herself.

And then there's the IRS. Given that both NJ and NY base their income taxes on the 1040 numbers, I think we can reliably conclude that Pugach filed the same BS with the feds.

ETA: it may be that Pugach is not only evading NJ tax, but is seeking a refund of the NY commuter tax withheld from her paycheck. Given the (extremely) fuzzy thinking throughout, it's not clear.

[Burnaby49]

Thanks, a totally new tax to me. I'd not heard of two separate income taxes based on the location of residency and employment. We don't have municipal income tax here, municipalities can only levy property tax.

I live in Burnaby, a separate municipality from Vancouver although if I stand on my doorstep and look west I can see Vancouver just two blocks away. I worked in downtown Vancouver for 35 years. As I understand your analysis if we had the same tax system here I would have paid income tax in both Vancouver and Burnaby while employed although much less in Vancouver. When I retired my Vancouver liability would have ended.

If she's been avoiding federal income tax too she's really screwed herself. Not that I have the slightest sympathy.

[wserra]

As I understand your analysis if we had the same tax system here I would have paid income tax in both Vancouver and Burnaby while employed although much less in Vancouver. When I retired my Vancouver liability would have ended.

Exactly. For many years, I lived in Westchester County (suburbs immediately north of NYC) but my office was in NYC. During that time, I paid NYS tax and NYC commuter tax.

[wserra]

Following up on Khanna Pugach, the Credit Suisse "senior data scientist" who claims to believe that you can make income non-taxable by sprinkling pixie dust on it: I didn't wait for the inevitable dismissal before posting. It arrived, sua sponte, about a month after my post (October 23, 2023). It basically says that you can't open a docket, even a mc, just to rant. Following the Van Pelt playbook, she then files a "refusal for cause" as to the dismissal order and a whole bunch of other things she doesn't like. Those include the oaths of office of multiple DJs - some of whom have nothing to do with the case - and a bill from NJ for $7.6K in unpaid taxes.

She then (10-24-23) refiles in District Court. 23-cv-9355 (NYSD). The Court promptly transfers it to New Jersey, as it concerns a NJ state income tax. 23-cv-22363 (DNJ). On Dec 11, 2023, the NJ case was dismissed because Pugach refused to either pay the filing fee or file an IFP (in forma pauperis) application. She, of course, refuses that for cause as well. Sure, Khanna, you're special. Why should rules that apply to everyone also apply to you?

This time, however, she considerately files the full billing notice from NJ, which shows 2022 wages from Credit Suisse of $128K. Moreover, she also attaches copies of several paychecks, which she endorses "Deposit for credit on account or exchange for non-negotiable federal reserve notes of face value per 12 USC 411. By: Khanna DBA KHANNA PUGACH". How can someone in a responsible position - a responsible financial position, no less - be this dumb?

Keep it up, Khanna. When Credit Suisse catches wind of this, you're likely history.

And good work, David.

[Pottapaug1938]

Viewing khmacdowell's post from November of 2019, I saw the following:


(1) Gold has inherent value. It's a good conductor and it's unreactive. But it didn't at the time in human history when it became a standard coinage metal. It was used for coins only for the unreactive part, which is simply analogous to the property of paper money and current coins to be very durable.

Gold no more has inherent or intrinsic value than does any other metal. Gold and other "precious metals" get their value because most people believe that they have monetary value, and are willing to pay to get some. Scarcity is also a factor -- for many years, aluminum was thought to have an intrinsic value, such that France even considered using it in its high denomination coins; but once aluminum became easily available in plentiful amounts, that killed its monetary value. If, somehow, a deposit of gold was found which would dwarf the amount of gold mined by humans throughout our history, gold would suffer the same fate. We'd use it for things like replacing lead in firearms ammunition, for use as sinkers for those who like to fish, as ballast, and more.

[wserra]

I have google alerts set up for several scammers and for a few concepts that such scammers use. One of those is "redeeming lawful money". Yeah, I know, this singularly stupid idea is not worth any more electrons than we've already spent on it. Still, there's always amusement value - and sometimes lessons about how wrong seemingly knowledgeable people can be.

So a couple of days ago, I get a "redeeming lawful money" alert as to this site. It appears to be a commercial for an anonymously-authored ebook on the subject. Ooh, it must be right. Still, despite the highly dubious provenance, I took a quick look at the commercial. Very near the top I find the heading "What is Lawful Money?" I do actually stop there to read more closely; as we've discussed here, "lawful money" (unlike "legal tender") is not a term with a legal definition, so these guys could basically make up anything they want. However, they claim to quote Investopedia, writing

According to Investopedia, Lawful money is any for form of currency issued by the United States Treasury, and not the Federal Reserve System. It includes gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, in which the government assigns value although it has no intrinsic value of its own and is not backed by reserves. Fiat money includes legal tender such as paper money, checks, drafts and bank notes. Lawful money is also known as "specie", which means "in actual form."

That, of course, is largely bullshit.

While I have looked at Investopedia in the past, I have never relied on it for anything important since, like Wikipedia, it can be edited by any of a lot of folks whose qualifications are unknown. Still, I didn't expect to find outright nonsense there. I was mistaken. Investopedia contains a section called "Lawful Money: Meaning, Overview, History". It contains the quoted words above verbatim. It was written by one Will Kenton, whose Investopedia bio says that he has an economics Masters from the New School, which means he should surely know better.

We've gone through this before, but - assuming that "lawful money" has a definition at all - of course FRNs come within it. It makes no sense at all to say that the law requires a creditor to accept something in payment of a debt that is not "lawful money". That, of course, is not just my opinion - numerous courts have so held. "Defendant argues that the Federal Reserve Notes in which he was paid were not lawful money within the meaning of Art. 1, s 8, United States Constitution. We have held to the contrary. United States v. Ware, 10 Cir., 608 F.2d 400, 402-403. We find no validity in the distinction which defendant draws between “lawful money” and “legal tender.” United States v. Rickman, 638 F.2d 182 (10th Cir. 1980) (emphasis supplied); Milam v. United States, 524 F.2d 629 (9th Cir. 1974) (holding that, while one is entitled by statute to redeem FRNs in "lawful money", all that means is more FRNs - in other words, FRNs are "lawful money").

One would think that someone with a Masters in economics would know this. And would not write false stuff that serves to enable scammers.

[HardyW]

I agree about Investopedia. I was following a particular qanon rabbit hole about "Cestui Que Vie Act" and there was a link to Investopedia article title "Cestui Que Vie" which (shall we say) was Not Very Accurate.
And I also noticed that the article had the bylines of three people including "fact checked by" which (shall we say) seemed unlikely. I didn't think to click the links of the three names, maybe I should see what qualifications they claim.

[The Observer]

I took a look at the site linked above and saw this nonsense:

SUPPORTING CASE LAWS [sic]

Federal reserve notes are dual purpose notes.

Volume 20 Action 31 Book American Jurisprudence Acts of Congress
Westlaw Lexus Nexus - 82 cases on lawful money not many know

Case 1982 Luis vs Page 1239 how to read court case
Redeem lawful money on form 1040 pursuant to United States Currency Code Title 12 banking codes

The IRS form 1040 changed. On line 6, on the second page, you enter your income as a negative number by putting the income amount to redeem in parentheses ($). You can redeem funds for the entire year and get lawful money. So if you’re claiming lawful money for this year, 2019, you’ll enter the entire 2019 gross income on line 6.

On the new 1040 form: To redeem lawful money is on Schedule 1: Additional Income, on line 21, enter the entire income for 2019 and write it as a negative number. The demand for lawful money, is written on line 21 as well. And duplicate it on line 22.

State returns are on the last pages of form 1040. Observe that standard deductions are also accounted for both federal and state

Gotta love the vacuous promise of 82 cases without any reference as well as the one case that has a vague descriptor which you probably can't find - and even if you did, it probably states the exact opposite of what is being claimed. There can't be any legal case where the court ruled - and explained - how you can detax yourself by redeeming money.

But this seems to be lifted from David Van Pelt's garbage method. Not that David ever let us in on his method, but we eventually reasoned it would resemble something like above.

[JamesVincent]

Well the one code quoted seems to be just a quote taken directly from the law itself.

Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.
(Dec. 23, 1913, ch. 6, § 16 (par.), 38 Stat. 265; Jan. 30, 1934, ch. 6, § 2(b)(1), 48 Stat. 337; Aug. 23, 1935, ch. 614, title II, § 203(a), 49 Stat. 704.)

https://www.law.cornell.edu/uscode/text/12/411

I see nothing in the law that says they have to give you gold or silver in exchange for those evil FRNs. I'm thinking more along the lines of the old $1,000 or higher notes that the Fed used to use to transfer funds to and from the banks.

[Pottapaug1938]

The FRNs in the various Series of 1928 have the clause "REDEEMABLE IN GOLD ON DEMAND AT THE UNITED STATES TREASURY, OR IN GOLD OR LAWFUL MONEY AT ANY FEDERAL RESERVE BANK." The notes in the various Series of 1934 say "THIS NOTE IS LEGAL TENDER FOR ALL DEBTS, PUBLIC AND PRIVATE, AND IS REDEEMABLE IN LAWFUL MONEY STATES TREASURY OR AT ANY FEDERAL RESERVE BANK." This verbiage was because the early US Notes were not legal tender for duties on imports and interest on the public debt. Some years ago, the language was changed to the one now in use.