This is a witch hunt by the taxman, I believe this took place before the IRS declared bitcoins to be property retroactively which is illegal.
this type of tactics by the IRS is in part what has caused the price of bitcoin to temporarily go down since it makes it difficult to purchase bitcoins.
The way the news appears it looks like it was a clear case of entrapment, since the cop made a lot of small purchases will the goal to gain his trust so he could be entrapped.
Charles shrem was also a victim of this.
Remember guys bitcoin is a financial revolution, revolutions are not peaceful, there will be some that fall but fighting for financial freedom is worth it.
but do not take unnecessary risks, if using localbitcoins find out the legal limits and play within those limits to reduce risk.
burtW was exercising his financial freedom that is not illegal based on the constitution, it is only made a crime because the taxman does not get his cut for something he did not help create, he did nothing to support, he did not contribute, nevertheless he wants his cut after all you are bypassing his inflation tax with bitcoins.
Also forcing people to pay the inflation tax is illegal under the constitution, that is why the constitution mentions gold and silver as money, it was to prevent the inflation tax that is currently payed under the US dollar and that tax is used mostly to fund wars. Since with bitcoin there is no inflation tax, the IRS is asking retroactively its users to pay the inflation tax which bitcoin by design was made to avoid, since it was designed to be a form of honest money and completely open. not closed like a typical fiat currency and inflated at will using qe (money printing).
To those that say he knew what he was doing, yes he knew, he was participating in a financial revolution.
Since I agree with almost every word of this, I might as well just quote it.
It's important to have the correct mindset when going into this. Don't ever believe that there really are rational rules out there somewhere and that it is possible to follow them and avoid all harassment. You can do everything perfectly, and still encounter a lot of bullshit.
Regardless, you have an absolute right to trade. Full stop. Everything else, the regulations, the taxes, the restrictions, is voluntary.
Further, the US government has zero jurisdiction over trade. They can only regulate commerce. It's right in the Constitution.
So what they will try to do, in these instances, is try to trick you into turning your trade into commerce. That can happen in dozens of ways. But it always involves the introduction of a third party and some kind of conditional binding agreement that you voluntarily agree to.
If you put your Bitcoins on your taxes, guess what? You've voluntarily introduced a third party.
If you register a Bitcoin business or sign up for a bit-license, guess what? You've voluntarily introduced a third party.
If you have an agreement with a Bitcoin ATM manufacturer that you will "operate" the ATM using his exchange services, guess what? You've voluntarily introduced a third party.
So, here's what you need to do in order to
trade Bitcoins. You hand over x Bitcoins; you get y of whatever (Paypal-bux, Federal Reserve Notes, etc) in return.
That's it.
The moment that the other party starts talking about "I'm going to do this" or "I'm going to do that" with whatever you trade him, that's an attempt to turn voluntary trade into a binding commercial agreement. The government will argue that, by continuing, you entered a commercial agreement with the other party and are therefore responsible for whatever idiotic things they told you they were going to do.
Yes, it's ridiculous. But that's what they really think.
That's the basis of their jurisdiction. It's the reason that every one of these actions includes the phrase "affecting inter-state commerce."
It all stems from an idiotic Supreme Court case,
Wickard v. Filburn. Filburn was a farmer who
voluntarily signed up to receive government subsidies on his wheat crop. From that point onward, the government argued that all of the wheat he produced, even for his own consumption, was bound by commercial agreement and subject to whatever regulations it wanted to impose on them. And, incredibly, a bought-off Supreme Court agreed.
So, the way to avoid problems with trading on LocalBitcoins is that, whenever the other party starts saying "I'm going to do this" or "I'm going to do that" with whatever you trade them, just cancel the trade and walk away. At the very least, if you have to continue, make it clear in no uncertain terms that whatever they do is their business, and that you are just engaged in
trade. You aren't their "partner". You aren't a "corporation". You aren't a "dealer". You aren't an "exchange". You're an individual engaged in trade.
