What Type of "Money" Are You Paying to the Internal Revenue Service?

Here is what the Constitution says about the federal authority to coin money in Article 1, Section 8, Clauses 5 and 18:

1 The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

5 To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

18 To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

And in Article 1, Section 10 of the U.S. Constitution, we find:

"No State shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit letters of credit; make any thing but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility."

Sounds pretty basic to us.  All money MUST be gold or silver or it isn’t money.  In spite of this, the federal courts have still managed to sidestep this requirement and authorize paper money.  The following cite from the case of Mathes v. Commissioner of Internal Revenue, 576 F.2d 70 (1978) establishes that even though the Constitution requires all money to be backed by gold, the government can ignore that requirement completely anyway!

Taxpayers first assert that they have a legal right to choose a lawful method of reporting income which in their case is to report their income of "notes" in terms of lawful, statutory dollars. Taxpayers correctly state that "the legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted." Gregory v. Helvering, 293 U.S. 465, 469, 55 S. Ct. 266, 267, 79 L. Ed. 596 (1935). However, the method used by these taxpayers to reduce their taxes is not a legal method.

Close to a century ago, the Supreme Court stated:

“Under the power to borrow money on the credit of the United States, and to issue circulating notes for the money borrowed, [Congress'] power to define the quality and force of those notes as currency is as broad as the like power over a metallic currency under the power to coin money and to regulate the value thereof. Under the two powers, taken together, Congress is authorized to establish a national currency, either in coin or in paper, and to make that currency lawful money for all purposes, as regards the national government or private individuals.” . . . (Emphasis added)

Juilliard v. Greenman, 110 U.S. 421, 448, 4 S. Ct. 122, 130, 28 L. Ed. 204 (1884).