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No, the ruling specifies "virtual currency" without naming any specific currency, Bitcoin is only used as an example.

Linkage:

IRS press release.
Full text (PDF) of IRS Notice 2014-21 (which includes a FAQ).

No, the ruling specifies "virtual currency" without naming any specific currency, Bitcoin is only used as an example.

Linkage:

IRS press release.
Full text (PDF) of IRS Notice 2014-21 (which includes a FAQ).

Not so fast. The IRS does tax barter transactions.

http://www.irs.gov/taxtopics/t...

TFA doesn't seem to have a link to the actual IRS ruling - WTF Bloomberg? New to the intarwebs? We do links here!

http://www.irs.gov/pub/irs-dro...

To qualify for tax exempt status churches also have to meet various criteria. (.pdf)

I will also note that everyone on Slashdot loves to quote the Constitution, but tend to be forgetful about some clauses.

First Amendment to the United States Constitution

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.[

There seems to be historical and documentary evidence that freedom of religion was important in the founding of the US.

There is not a tax on anyone's death. There is a tax on receiving an inheritance.

No, it really is a tax on their death. The money is pulled out of the estate before being distributed.

Given X dollars, dividing them among Y heirs leads to no taxes, regardless of how large X is (although the higher X is, the higher Y needs to be).

This is just wrong. This is not how estate taxes work. It really is based on the initial amount and not how much it's divided up. From the IRS:

The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706 (PDF)). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets. Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate." These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify. After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent's dying in 2010 and 2011 (note: there are special rules for decedents dying in 2010); $5,120,000 in 2012, $5,250,000 in 2013 and $5,340,000 in 2014.

http://www.irs.gov/Businesses/...

Just to support the parent's poorly worded claim, filing for estate taxes is only required in 2014 if the estate net value exceeds $5,340,000 in the US.

By the way, this lower limit has increased dramatically in the last decade, from $1,500,000 in 2004. I have to agree with the parent, though, that if you're inheriting over $5 million you probably are not considered "middle class."

1. Please read the rest of my comment. I factor in Social Security - and that will only INCREASE their effective tax rate (how can additional taxes paid REDUCE their tax rate?)

2. Provably false. See EITC. You can have an income and get tax back - even refunded more than the taxes you paid in. Meaning you can, in effect, not only not pay taxes on income, but get paid to not pay those taxes.

3. And how does that factor into anything? Tax payments, tax rates are still going up for the rich - and down for the poor. How are the taxes paid by all taxpayers NOT heavily progressive?

4. Yes, that's the point of savings! A little saved every month over a long period builds up. Pass it on to your next generation, and it grows even faster. Of course, you get to pay up to a 20% capital gains tax rate on that income you earn from accumulated wealth. It's hardly tax-free - and is at a rate to put you solidly in the top 5% in terms of tax rates.

As far as progressive tax, WE HAVE progressive tax! Everything I've shown proves as much. How much more progressive should it be?

Just fill this out and you get an ITIN - which is as accepted as a Social Security number. It's even the same 3-2-4 type of number as a SSN, so it works great for illegal aliens to use for opening bank accounts, getting benefits, etc. And yes, a past girlfriend of mine (Thai national) had overstayed her visa about 8 years and used her ITIN for everything. At least she earned a living doing nails at a local nail salon, but it was a cash business (she "leased" her nail station). Never had a problem filing a tax return or getting benefits when she needed them... ITIN to the rescue!

What I want to know is why isn't Apple liable for US taxes here?

They are, they pay a lot of U.S. taxes.

If I leave the country and go work in another one, all money I make is still taxable by the US federal government

No, only after a certain amount (almost $100k) is it taxable.

Notably cash is anonymous in legal transactions, but only up to a point:

http://www.irs.gov/Businesses/...

I wonder if the IRS considers this applicable to *coin equivalent transactions as well.

.

According to Internal Revenue Bulletin: 2012-14 states in part

http://www.irs.gov/irb/2012-14...

Section 1.162-3 provides, in part, that a taxpayer carrying materials and supplies on hand should include in expenses the charges for materials and supplies only in the amount that are actually consumed and used in operation during the taxable year for which the return is made.

This means that you cannot purchase spare parts or materials in order to defer income for the year. This stops a business from purchasing two months of stock or a back up copier that will sit on a pallet until the current machine breaks in order to create a tax advantage for the year. So yes, this stops the amount paid for the spare parts from becoming an expense for the year they are not used in.

Small businesses exist, and is probably a good reason why we should move to Universal Health Care.

There is no real good reason to move to universal health care. Best guess puts us at 48 million Americans without insurance out of 313 million or roughly 15%. simply expanding Medicare/Medicaid for those who cannot legitimately afford it would be sufficient. getting rid of risk pools by company and mandating they offer any policy sold to a company as an individual policy and perhaps something to ensure preexisting conditions aren't excluded. Looking at the universal system in other countries, they aren't the best unless they are the ones with private systems competing alongside the public system. But depending on where you look, you can find horror stories in all of them. We wouldn't have anything better and likely not anything better then what we have now.

I would make a case for entrapment.

If you step into a trap willingly, it ain't entrapment.

Still, law enforcement is breaking the law when they create crimes to arrest people for.

This is beyond stupid.

The elements of the crime of money laundering are set forth in the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and Convention against Transnational Organized Crime. [2000] It is defined as knowingly engaging in a financial transaction with the proceeds of a crime for the purpose of concealing or disguising the illicit origin of the property from governments.

Criminalizing money laundering

Money laundering has been practiced for over 6000 years, but the term itself comes from the prohibition era of American history.

money laundering

unless they're going to make private money transactions illegal, this case doesn't really mean anything for the bigger picture

[Cash for legal purposes is defined as any] transaction in which the recipient knows the payer is trying to avoid the reporting of the transaction on Form 8300.

FAQs Regarding Reporting Cash Payments of Over $10,000 (Form 8300)

You probably need to find a new CPA

How are you going to pay them (they don't accept Euros) and how do they know how much you owe them. Do they go by the exchange rate at the time you were paid, or do they go by the exchange rate at the time that you change them to dollars?

The IRS says: "[Y]ou must immediately translate into dollars all items of income, expense, etc. (including taxes), that you receive, pay, or accrue in a foreign currency and that will affect computation of your income tax. Use the exchange rate prevailing when you receive, pay, or accrue the item."

The out of control healthcare costs are why this administration is trying to reduce overall costs by:
* creating a 2.3% medical device excise tax for manufacturers and importers.
* increasing percentage (10%) of your income you must spend in unreimbursed medical costs before they can be used in itemized deductions on your tax return.
* forcing parents cover the cost of insurance of "children" until the "children" are 27 granted this makes it cheaper for the "children" but not for the parents
* creating an annual fee (i.e. tax) for certain health insurance providers (granted this does not directly increase the cost of healthcare)
Please note that these are just the first few I found (on government sites) after a few seconds of searching, so this list certainly is not exhaustive.

For references see:
* http://www.dol.gov/ebsa/faqs/faq-dependentcoverage.html
* http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions

You're not the IRS. All Computers and peripheral equipment depreciate using the Five-year table:
http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Sale-or-Trade-of-Business,-Depreciation,-Rentals/Depreciation-&-Recapture/Depreciation-&-Recapture

It's pretty easy to check. It's five years.

That's not how depreciation works for taxation purposes in any sane jurisdiction. This includes USA where depreciation is set by IRS, not some company PHB.

I'm not an account but isn't that what this says?

Secondly, spending money for the sake of not having income, you may as well just give your employees a raise or bonus instead. They'll be just as happy with a "normal" $1k computer (provided it works for their job), but much happier with $2k bonus per year.

I'm pretty sure its spending money for a much more well equipped computer that would work best for their job. And is also portable, and makes sharing of high speed storage with other systems much easier.

So lets drop the hobbyist title. If someone is working a home business that isn't yet profitable because there is an awful lot of overhead to code first, they've been working that time.

Then you'll have to get half of the House of Representatives and half of the Senate to amend the definition of hobby in the part of the tax code related to business expense deductions.

You're making the common mistake of assuming that if the minimum wage were $20/hr, all the low-wage jobs would become $20/hr.

That's not what will happen. The low wage jobs which are truly underpaid (i.e. they generate more than $20/hr of productivity) would indeed have their pay increased to $20/hr.

But all the other low wage jobs would simply disappear. There's absolutely no point for an employer to pay someone $20/hr is they're only getting $10/hr or $15/hr of benefit from it.

CEOs being overpaid is a legitimate problem. But their effect on overall incomes is not as big as you think it is. According to the IRS tax stats, the total income of everyone making over $500,000 in 2011 was $1.351 trillion. If you confiscated all their income and distributed it to the ~150 million workers, it comes out to about $9000/yr per worker. Or about a $5/hr increase assuming you work 8 hours a day, 50 weeks a year.

It is possible that at some point, major US Bitcoin exchanges might start reporting the transactions somehow, but that is just a transaction, it isn't "income" or "profit".

An information return is required by law, based on payments that a Bitcoin "Exchange" or Bank makes to an individual. It is up to the individual to report on their tax return what portion of the proceeds are income.

A 1099B is for stock transactions from a broker

A 1099B information return is the form required to be filed by barter exchanges as well. Bitcoin exchanges that allow a customer to sell or purchase Bitcoins ("TRADE DOLLARS") are barter exchanges. The fair market value of raw proceeds of transactions from Barter Exchange must be reported to the IRS using 1099B, see the barter exchanges

Bartering is the trading of one product or service for another. Usually there is no exchange of cash. Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a barter exchange company. A barter exchange is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. ...

Barter exchanges have their own unit of exchange, usually known as barter or trade dollars. Trade dollars or barter dollars are valued in U.S. currency for the purposes of information returns. Trade dollars allow barter to take place between parties when one party may not have a simultaneous need or desire for the goods or services of the other members.

Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash.

Requirement for Barter Exchanges to File Information Returns Barter exchanges are required to issue Form 1099-B (PDF) Proceeds from Broker and Barter Exchange Transactions

This is information related to your post rather than a reply to your post, but:

> And because they're not recognized by the feds, they're not covered by the full faith and credit clause, meaning they don't have to be recognized if you go to a different state.

WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage.

http://www.irs.gov/uac/Newsroom/Treasury-and-IRS-Announce-That-All-Legal-Same-Sex-Marriages-Will-Be-Recognized-For-Federal-Tax-Purposes;-Ruling-Provides-Certainty,-Benefits-and-Protections-Under-Federal-Tax-Law-for-Same-Sex-Married-Couples

It's a start.

If you don't intend to return then likely you won't face any issues. But if, for example, you're a government contractor stationed in a foreign country and don't follow the tax code you will be smacked quite hard upon your return. And the relevant link from the IRS:

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

Wow. Your "assurance" is pretty worthless. The Bureau of Revenue Service was officially renamed to the Internal Revenue Service in 1953. They had been using the name for a long time, as you can see on this Form 1040 from 1918. The organization itself has existed continuously since 1862.

Wow. Your "assurance" is pretty worthless. The Bureau of Revenue Service was officially renamed to the Internal Revenue Service in 1953. They had been using the name for a long time, as you can see on this Form 1040 from 1918. The organization itself has existed continuously since 1862.

IRS mileage rate for 2013 is 56.5 cents per mile, so 500 miles would be $282.50.

Subtract the cost of gas (US new car average of 24.9 mpg, so 20.08 gallons @ $3.269 US average = $65.64) and you're left with $216.86 as the cost of operating a car for a 500 mile trip.

The IRS rates are high, you say. This calculator says between $0.15 - $0.30 per mile for wear and tear. Let's use the low figure, $0.15, which gives us 500 x $0.15 = $75.

Note that "wear and tear" includes depreciation, because the more miles you drive, the lower the car is worth. A 2002 car with 20,000 miles is worth more than the same car with 200,000 miles. It also includes tires, brakes, oil, timing belts, etc because the more you drive, the more often you have to change these things.

Many people don't count those as per-mile costs, and instead act like a new clutch or timing belt is a total surprise, instead of an expected result after so many miles of driving. However, they are valid per-mile costs, and if you budget appropriately, you likely won't ever have $1,000 surprise repairs - you'll just have expected repairs.

So if it costs the rental car company $75 and they charge you $50, how do they make money? Well, it doesn't cost *them* $75.. they have their own mechanics to do oil changes, brakes, tires, etc, and they get bulk rates on parts and fluids.

figure out just how much they owe the country, without reading the tens of thousands of pages of IRS forms guidance.

I have never found it challenging to file my taxes using just the information from IRS.gov. IRS documents usually explain things very well.

Been doing it for years with government provided software.

Mind you it doesn't say 'cloud' every 5 words, but it submits it all online and even auto fills in a lot of your data from government databases. Not sure how long it has been available for but many many years without incident.

Oh and its free.

Thankfully, Intuit, Inc. (by a totally crazy coincidence also the maker of TurboTax(tm), a market-leading tax software solution) has been fighting to save us from communism...

So here in the Land of the Free, the IRS probably has the information it needs anyway (for fraud detection, and because Joe Worker's employer already reports it); but we can't let them destroy the free market, and capitalism itself, by making the process any easier. Instead, you just hand over your money and personal information to an 'Authorized e-File Provider' and be glad that you live in the bestest ever country on earth.

We will be rolling out a similar system for health insurance soon.

What will it cost after it's commercialized? We'll see.

More.
A lot more.

Um, no. IRS Publication 17 doesn't agree:

Bribes. If you receive a bribe, include it in your income.

Yeah, he's wanted for international espionage. I'm sure a charge of tax evasion doesn't bother him!

Amusement aside, the tax Snowden owes the IRS is likely zero.

It is true that all American citizens worldwide are supposed to file with the IRS.

But, if you have no US-sourced income, it is unlikely that you owe anything to the IRS.

To my surprise, there is a US-Russia tax treaty to avoid double-taxation: http://www.irs.gov/Businesses/International-Businesses/Russia---Tax-Treaty-Documents

The bigger hassle is that US citizens worldwide have to declare all their bank & investment accounts to the IRS under the recent FATCA law: http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-(FATCA)

Yeah, he's wanted for international espionage. I'm sure a charge of tax evasion doesn't bother him!

Amusement aside, the tax Snowden owes the IRS is likely zero.

It is true that all American citizens worldwide are supposed to file with the IRS.

But, if you have no US-sourced income, it is unlikely that you owe anything to the IRS.

To my surprise, there is a US-Russia tax treaty to avoid double-taxation: http://www.irs.gov/Businesses/International-Businesses/Russia---Tax-Treaty-Documents

The bigger hassle is that US citizens worldwide have to declare all their bank & investment accounts to the IRS under the recent FATCA law: http://www.irs.gov/Businesses/Corporations/Foreign-Account-Tax-Compliance-Act-(FATCA)

If you'd read the ACA you'd know it gives the executive branch(namely the IRS and the HHS Secretary) so much regulatory authority that reading the bill itself is useless in determining it's eventual scope.

Anyone that wants to know what we're really in for should look at the original legislation authorizing the creation of the IRS and compare that with the mix of laws, regulations and 'guidelines' that govern revenue collections today.

Or, you could take the foreign taxes paid as a credit. " Taken as a credit, foreign income taxes reduce your U.S. tax liability. In most cases, it is to your advantage to take foreign income taxes as a tax credit.. These things are complex and depend also on tax treaties between countries, so your simple example is at best not really helpful and at worst, wrong.

I over-simplified to spare the innocent migrains from the Vogan poetry the USG publishes as law, but Small Business Health Care Tax Credit Questions and Answers: Determining FTEs and Average Annual Wages is a good place to start without getting nausious.

First of all it wasn't a bill proposed by the Republicans a decade ago. It was a non-profit think tanks policy report setup to counter Hillarycare.

The Rules for political non-profits are quite clear. I wish you'd have learned about them a little before saying anything ignorant. Here's a little help from me to you:

http://www.irs.gov/Charities-&-Non-Profits/Other-Non-Profits/Social-Welfare-Organizations

"To be tax-exempt as a social welfare organization described in Internal Revenue Code (IRC) section 501(c)(4), an organization must not be organized for profit and must be operated exclusively to promote social welfare."

"To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual."

That took me all of one minute. Let me break it down for you. The tax system is so convoluted that different types of organizations fall under different sections of the 501(c) umbrella. Fiscal conservative groups would rightly be denied 501(c)3 status but they are perfectly entitled to 501(c)4 status because the government is not allowed to say social welfare is only furthering Federalism.

http://abcnews.go.com/Business/wireStory/walgreen-moves-health-coverage-private-exchange-20289346

Here's a story that contradicts your statement and its not the only company doing this. Why would young people want to pay more for insurance under Obamacare than they would pay for the exact same coverage now? Why would companies keep their employees in expensive health insurance plans when they can drop them into the Obamacare cesspool and pay a smaller fine?

Anyway I'm glad I could so effectively refute everything you said with facts even though I'm an idiot. Today is Oct 1st the day exchanges are mandated by law to be setup. I dare you to successfully get healthcare through an Obamacare exchange today and not call it convoluted.

It depends what you mean by “normal”. There rules are normal for people who trade heavily. Most day traders fall under these rules. I have seen a few – and I mean less than a dozen individuals - trip up and trigger these.

These rules fall under the “constructive sale” rules.

http://www.irs.gov/publications/p550/ch04.html#en_US_2012_publink100010758

No wonder she cried the 5th, which btw, I'm going to do next April 15th, when I sign my tax forms, and they are blank. "I refuse to answer these questions on the grounds that it might incriminate me"

Good luck with that.

Here's the "ridiculously complex" terms they're expected to comply with:

1) File a Form 990 on time each year.

I'm guessing that X.org would be eligible for a 990-N (< $50,000 gross receipts each year), also known as an 'e-Postcard,' because it can be filed online. Here's the ridiculously complex information required on a Form 990-N:

1) Employer identification number (EIN), also known as a Taxpayer Identification Number (TIN).
2) Tax year
3) Legal name and mailing address
4) Any other names the organization uses
5) Name and address of a principal officer
6) Web site address if the organization has one
7) Confirmation that the organization’s annual gross receipts are $50,000 or less
8) If applicable, a statement that the organization has terminated or is terminating (going out of business)

If by some stroke of fundraising genius, they managed to take in more than $50,000, they'd need to file a 990 or 990-EZ (EZ can be filed as long as < 200,000 per year is collected). The EZ is 3 pages, and looks pretty much like a standard Federal 1040-EZ, just with questions related to income sources for the foundation, instead of an individual.

Some tax laws are stupidly complex. These rules aren't, nor are they particularly burdensome to comply with.

There's no evidence that this was the result of some sort of "dragnet" focusing on an organization that drew the ire of the IRS. Organizations which fail to file completely and on time AUTOMATICALLY have their status revoked after 3 years of failure to file in such a fashion. (See this page: http://www.irs.gov/Charities-&-Non-Profits/Automatic-Revocation-of-Exemption)

If they wanted to avoid the long arm of the IRS, they should have... filed their taxes on time, and met the requirements of their tax-exempt status.

Section 6033(j) of the Internal Revenue Code automatically revokes the exemption of any organization that fails to satisfy its filing requirement for three consecutive years. The automatic revocation of exemption is effective as of the due date of the third required annual filing or notice.

( Source )

This isn't an "ambush." What accountant doesn't realize the importance of filing taxes on time? What accountant fails to realize this *three years in a row*? What board trusts their financial matters to an accountant who doesn't realize these things?

This is standard procedure - they failed to file properly 3 years in a row, and so they had their tax exemption revoked. The IRS isn't "springing" anything on them. The IRS isn't "ambushing" them. The IRS is following it's standard procedure - if you want special tax exempt status, there are a few requirements you have to meet. One of these is filing your tax returns in a timely and complete manner. If you fail to do this, you will automatically be de-listed, and you'll receive a polite letter indicating that that has happened. They shouldn't be chasing after people. The agreement when you're granted tax-exempt status is that you will file properly and on time. That's your notice. Failing to do so results in revocation.

For example, if the IRS came out with a statement that said "We looked at a sample of 10,000 registered 501c3's, and found that 53 of them had not filed a return in the last 2 years. We revoked the 501c3 status on 51 of them, and are looking into assertions by 2 of them that they did file and we [the IRS] must have lost them." I'd look upon this action a lot more favorably.

They have

This isn't some mustache-twirling conspiracy. X.org failed to file the paperwork and it caught up with them. The IRS does this to any organization "for failing to file an annual information return or notice with the IRS for three consecutive years". It wasn't as if IRS was turning a blind-eye to X.org until they were politically motivated to crack down on open source projects; three years is the default leeway granted. X.org screwed up their paperwork and it caught up with them, end of story.

For Windows PCs, pretty much, yeah. Windows PCs have no profit net. Even with crudware and Microsoft comarketing incentives the average OEM loses money any given year, making it up with their other business lines like software or services, servers, networking or storage. It's not my definition. It's the IRS.

The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.

The question here is how the finance ministry would come to know of a person's Bitcoin holding as it is a decentralized currency with no governing body to keep count on the number of Bitcoins a person has.

They might not know about it but that doesn't relieve the taxpayer of their legal obligations. If you get audited and it comes to light that you aren't declaring income then you can find yourself in deeeeeep trouble. They can send you to jail for tax evasion. I'm not familiar with how it works in Germany but in the US you would at minimum declare income from bitcoin related activities on line 21 of your 1040 form under Other Income. The legality or source of this income is irrelevant to whether you are required to declare it. If you mine bitcoins then you are generating income (you have acquired an asset with a market value hence it counts as income) and you would be required to declare it as such on your tax return.

If the employer provides transportation service, that is a Taxable Fringe Benefit according to the IRS.

Yes, we get that Bitcoin is potentially useful for tax evasion. Can you spell out why that is socially desirable?

Tax evasion isn't what's "socially acceptable". Unrestricted trade is. The United States has become the 300 pound gorilla in the room, telling telecommunication companies to sign secret agreements to tap all their lines, even when they aren't in the US. They freeze accounts of political enemies. And that's not even touching on all the trade restrictions from patent and copyright law, etc.

A currency controlled by no government is immune to all of these problems, and while tax evasion is a side effect of this, it is by no means the only selling point.

People do bargain directly with each other now. The government isn't involved in that. But if good or services are sold, that transaction tends to be subject to taxes, although not always. And that does ignore the underground economy that tends to involve cash transactions.

The IRS called, something about you being very wrong. The IRS also taxes barter trade. You think just because you don't use cash the IRS doesn't want its share? That's adorable.

As with everything else there's a form for that! We should charge the feds for doing paperwork for them all the damned time.

Also, they're serious about it even ignoring the face value of legal US tender to prosecute.

It is not very complicated. It is called the '3-of-5' rule:

If you report a profit in at least 3 of 5 years, it is presumed to be a for-profit business.
If you report a loss in at least 3 of 5 years, it is presumed to be a not-for-profit hobby.

But since not all business are always profitable...

If you don't make a profit for a few years, there is also a 9-factor test the IRS applies if you want them to. Mostly it is useful for startups that want to be considered a business in spite of an economic loss, and for larger corporations that are going through a structured bankruptcy recovery plan.

Also, it doesn't attract tax if you barter the vegetables for something else.

ho boy... just a second there, better be careful about what you think isn't taxable: "You must include in gross income in the year of receipt the fair market value of goods and services received in exchange for goods or services you provide or may provide under the bartering arrangement."

http://www.irs.gov/taxtopics/tc420.html