IRS LEARNING . . .

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
  SANDY SANDFORT               Reply to:  ssandfort@attmail.com
 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paul Baclace wrote:

    Well, obviously he should have taken tip from Ollie
    North and paid a courier to fly back and forth with
    $9500 at a time.  No laws against that.

Well, yes and no.  As Perry pointed out, there is no limit to how
much you can take out if you report it.  The trouble is, though
it is legal to take out less than $10,000 without reporting it,
you can't perform a series of such transactions in order to
ultimately move out an amount greater than $10k.  They call it
*structuring*, and it 'taint legal.

Of course, structuring may be difficult to detect, so as a
practical matter, you might get away with it.  (If, however, you
are found with $9500 in cash, they still might seize it under our
wonderful new "fruits of drug dealing" laws.)  But in any event,
there are better ways to accomplish the same result.  My favorite
*fun* solution would be to buy $80,000 in travellers cheques and
then *burn* them.  I leave the rest of the transaction as an
exercise for the student.

 S a n d y

>>>>>>    Please send e-mail to:  ssandfort@attmail.com    <<<<<<
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

>there are better ways to accomplish the same result.  My favorite
>*fun* solution would be to buy $80,000 in travellers cheques and
>then *burn* them.  I leave the rest of the transaction as an
>exercise for the student.

Well, yes, I suppose you could then leave the country, find an Amex
office and file a claim for the missing $80,000 of travelers checks,
but wouldn't this generate precisely the kind of paper trail you're
trying to avoid?

Anyway, back to cryptography, I do suspect that the government will
eventually point to digital cash as justification for controlling all
of cryptography. Or they will refuse to back it up in court as legal
tender, thus helping undermine it. I know there's this concept called
"reputation" that's supposed to take the place of the government
enforcing contracts, but I have a hard time understanding just how it
will work for very large transactions between individuals (like buying
a house or even a used car).

Phil

Phil Karn <karn@qualcomm.com>

> Anyway, back to cryptography, I do suspect that the government
> will eventually point to digital cash as justification for
> controlling all of cryptography. Or they will refuse to back it up
> in court as legal tender, thus helping undermine it.

Well, credit cards aren't really legal tender either - nobody is
required to accept them.  People accept them because of convienience,
but the government doesn't recoginze it as legal tender (Try telling the
IRS you want them to charge it to your MasterCard hahaha...)  Digital
cash would probably be the same.  The government probably wouldn't take
it, but that wouldn't stop everyone else from using it.  Hmm...  if they
decalred it not legal tender, does that mean you could take $10,000 in
digicash out of the country and not be required to report it? 
hehehehe...  or maybe you could just spend your digicash out of a
foreign bank account.  (Bank of Oceania?  hmm...)

>Anyway, back to cryptography, I do suspect that the government will
>eventually point to digital cash as justification for controlling all
>of cryptography. Or they will refuse to back it up in court as legal
>tender, thus helping undermine it. I know there's this concept called
>"reputation" that's supposed to take the place of the government
>enforcing contracts, but I have a hard time understanding just how it
>will work for very large transactions between individuals (like buying
>a house or even a used car).
>
>Phil

Think of ATM's... we use them and assume that our money is safe...
people are comparing credit cards to digital cash... the main difference
is that the credit-card companies guarantee payment, and it's NOT OUR
MONEY... also.. we get receipts for ATM transactions, would we get
encrypted receipts by e-mail that contained transaction info in a
verifiable format?  Would it be possible for a third party to somehow
carbon-copy all of your receipts to them?

It's mind-boggling, the need for security as the computer age rules our
lives...

			Anthony Ortenzi
			ao27+@andrew.cmu.edu

Phil Karn says:
> Anyway, back to cryptography, I do suspect that the government will
> eventually point to digital cash as justification for controlling all
> of cryptography. Or they will refuse to back it up in court as legal
> tender, thus helping undermine it. I know there's this concept called
> "reputation" that's supposed to take the place of the government
> enforcing contracts, but I have a hard time understanding just how it
> will work for very large transactions between individuals (like buying
> a house or even a used car).

You don't need legal tender laws to make a currency worthwhile.

In many third world countries, U.S. Dollars and German Marks are more
accepted than local currencies for transactions. There are no laws in
those countries mandating that these currencies be accepted -- indeed
the laws usually make them illegal -- and yet they are accepted. If
Union Bank of Switzerland set up a digital cash system that officially
was not sanctioned for use in the U.S. but in practice could be, it
would make little difference whether the U.S. Government liked,
sanctioned, or even permitted it.

How could "reputation" take the place of government in the enforcement
of contracts? Well, I'd say that you don't quite have the right
question in mind, but I would direct you to Bruce Benson's "The
Enterprise of Law." Basically, I will start by pointing out that
modern contract law was developed entirely in private merchant courts
without any power of enforcement, and yet still worked. The system in
question, the Lex Mercatoria, was only co-opted fairly recently by
state-based legal systems. There are many ways that contracts can be
enforced without the use of the state, and I don't mean through the
use of mafia hit-men, either.

Perry