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In this issue: Going to Court for Bitcoin
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Who is Dale, and What will he Do?? (2/25 - 3/6, I'm OUT!)

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The Simple but Ugly Solution

Solution?  Is there a problem?  Yes.  I am accused of running an "Unlicensed Money Transmitting Business."  I have been considering getting a license.  However, until the judge, Dale Fischer, confirms that I have broken the law, I think it would be premature.

I just created a post on my blog to introduce three PDF files that contain a lot of the information I'd like to share.  If you take the time to read through them and feel it's worth summarizing better than what I've done below, please consider leaving a comment on the blog. Also, feel free to post questions there.

My understanding is that the federal government has been "legislating from the bench" by making decisions that don't necessarily follow the law.  My favorite example is this Tax Court case in which Judge Holmes says Crites is confusing "means" with "includes" regarding the definition of "person."  This is explored more below, but doesn't belong in a summary of my case.  The summary is that the prosecutor, Frank Kortum, and his team are working to get Judge Fischer to decide that anyone who does "enough" trading in bitcoin needs to have a Money Transmitter License.  This is based on a distinction between being a "currency exchange" and "purchasing and selling bitcoin for one's own account" as described in some guidance from FinCEN.  The "judicial activism" here would be courts expanding the definition of "currency" so that it is broader than stated in the law.

When a judge does render a decision that is not aligned with the actual law, this sets a precedent in case law that allows the error to be propagated. For example, there are precedents expanding the definition of currency which I haven't explored because I believe that the actual law supersedes the case law, unless it is the Supreme Court that made the decision.  Once a judge creates this precedent for error, we the people must wait for a smarter judge to re-evaluate and overturn the error.

A definition in law provides a line that divides things that are to be included from things that are to be excluded.  What Judge Holmes writes in the Crites case suggests that the definition has no effect since everything to be included by it is already on the "person" side of the line.  If my understanding is incorrect, it would be helpful to have a description of things that are moved from one side of the line to the other by the definition at 26 USC 6671(b).

Of course, this is my understanding of the words written, so I might be wrong.  Who is to say?  Well, if people can't understand it, there is a healthy body of evidence suggesting that the ambiguity makes it void, at least in the Crites case.  See references to Supreme Court decisions about this on pages five and six in this document.

If you're interested in my case, please check the first link for details and a place to send me public questions.

Dave
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