It is hard to argue that the American surveillance state is much different from the surveillance state of communist East Germany, the Soviet Union, or any other dictatorship. Many East Germans, Soviet Russians, and those living under the boot of a dictator accepted such perverted surveillance as inevitable and unavoidable. Many Americans will do the same.

But the perverse invasion of our fundamental human right to be free from ubiquitous surveillance can be avoided. Stop PRISM surveillance with a few simple tools and techniques. Whether you are Marty McFly, doing some “bird watching” or you are surreptitiously video recording a sports reporter in her hotel room, surveillance of this kind is for perverts.

Extent of PRISM Surveillance

To stop PRISM surveillance, you need to understand exactly what information the US government has been collecting about you. If you haven’t taken specific steps to protect your privacy, the government has collected:

All of the phone numbers you dial,

Every phone number who dials you,

The owner of each of those phone numbers,

The length of each call,

The location of both phones involved in the call,

The content of what was said, if desired,

Every website you have visited,

Every term you have typed into a search engine,

The content of every email you have sent,

All activity on Facebook,

All activity on Skype,

All of your Instant Messages,

Your bank information,

Your credit card information.

And much, much more.

Conversations with your lawyer or spouse are not exempt. In a digital society, a collection of these records on any individual represents a very complete picture of the innermost thoughts and desires, as well as almost all of the daily actions, whether you are technologically savvy or not. Although this surveillance currently affects hundreds of millions of Americans, there are specific steps that can be taken to stop PRISM surveillance of much of this information.

Strategies to Stop PRISM Surveillance

Government reform will no doubt be the focus of many to stop perverted PRISM surveillance. Government reform can be effective if it reduces the power of the government to be a peeping Tom on law abiding people. Creating another government body to oversee the current surveillance apparatus, on the other hand, will be like putting a second fox in charge of overseeing the fox that is guarding the hen house. The secret FISA court is one such fox that failed to prevent unconscionable abuses of Americans.

Legislative Effort to Stop PRISM Surveillance

Legislators write the statutes that innocent people rely on to protect themselves from unwarranted government intrusion. TheFourth Amendment to the Constitution is one such statute which was drafted, in part, in reaction to writs of assistance, general authorization granted to British soldiers to search any house for contraband, without any suspicion of a crime being committed. It has been held by the courts that “the principal object of the Fourth Amendment is the protection of privacy.”

Arguably, the Fourth Amendment should already apply to the perverted surveillance of the PRISM program. If the Fourth Amendment, as interpreted and applied, does not cover the records gathered by the PRISM program, every effort to extend statutory protection to those records should be made.

Passing new laws, or repealing old ones, may or may not achieve widespread success. The legislative abortion of the PATRIOT Act, the Bank Secrecy Act, FISA, and numerous other actions by Congress and other legislative bodies have done wonders to erode the fundamental right of privacy of Americans over the past several years. Plus, there are plenty of perverts currently in Congressdefending the digital raping of Americans.

Judicial Reform to Stop PRISM Surveillance

The court system is another tool to effect change to protect the human freedom for law abiding people to privately communicate. Whether through lawsuits in civil court, appeals of criminal court rulings, or creation of other supervising courts, real change can and has occurred through the judicial branch.

This option is less attractive than effecting change through the legislature. Although there are many strong judicial advocates for privacy, like Alex Kozinski in the Ninth Circuit, himself a survivor of a Romanian dictatorship, the judicial branch has had mixed success at protecting privacy in recent years. Courts also have significant hurdles to overcome to apply the principal of protecting the fundamental right of privacy in all of the records collected in the PRISM program.

The ability of the government to collect certain records of phone calls is well engrained in American jurisprudence, as well as the inability to protect the most private records that you share with others. The judicial branch was also tapped to protect the rights of Americans in secret FISA courts, but we see where that check and balance has gotten us.

Executive Reform to Stop PRISM Surveillance

The executive branch could issue an order, draft a policy memo, or take some other step to limit its collection of private information of Americans. This does not prevent the next perverted president from issuing his own secret orders to start the PRISM program again. Plus, it is the executive branch that has been abusing the law secretly in the first place.

Executive officials have repeatedly lied to Congress and the American people over this, and other actions. Nixon, W., Obama, it does not matter the political party, all have abused the rights of Americans through surreptitious and illegal surveillance. What makes us think the next president will be any different?

Corporate Protection to Stop PRISM Surveillance

Many of the service providers whose customer information was siphoned off by PRISM have fallen all over themselves to prove to the public that they have not revealed private customer information. Their efforts to pacify their customers may be motivated more by the enormous profits they make when you provide them with data than with their protection of your fundamental rights. Verizon, Facebook, Yahoo, Skype and the dozens of other companies whose data is now in the hands of the Feds cannot protect your privacy, especially if they have any business in the U.S.

Not only are these companies prohibited by law from telling you if they have gotten any secret orders to provide customer data, the Fourth Amendment is least likely to protect the data you give up to companies. They can be easily compelled to be a witness against you.

How To Stop PRISM Surveillance

The most effective way to stop PRISM surveillance of as much information as possible, in both the short term and long term, is for each individual to protect their own privacy. There are numerous tools and techniques, most of which we have already discussed on HowToVanish.com, to protect your fundamental right to be unbothered by perverts. All of the tools and techniques follow two important principles.

Open Source Software to Stop PRISM Surveillance

First, wherever possible use open source software to communicate. Open source software is free and available to anyone. The code is publicly reviewable so any weaknesses and backdoors can be found and revealed. If software code isn’t open source, it can’t be reviewed and may contain code which allow perverts in the company, or in the NSA, to watch you. Open source software usually has no central organization to coerce into spying on you.

Use Resources in Foreign Countries to Stop PRISM Surveillance

The second best option is to use service providers in other countries, or who are partly in other countries. Although foreign service providers are subject to coercion just like US companies, it is at least better than having all of your data in one jurisdiction.

Email -

Use Thunderbird with the Enigmail plugin to get PGP encryption of your email for free. See the specific steps a previous How To Vanish article on how to set up free email encryption.

Hushmail is a good second option for encrypted email based outside of a US jurisdiction with some free options and some paid options.

Silent Circle is another good encrypted email solution.

Phone -

Redphone from Whispersystems is a good open source option for Android phones to encrypt the content of your phone calls.

Silent Circle also has encrypted phone and video conferencing services.

Text Message/Instant Message -

Pidgin is a free app that lets you to encrypt instant messages when used with the OTR (“off the record”) plugin.

Although I wouldn’t rely on incompetence of the surveillance apparatus as a strategy, even the encryption of text messages offered by Apple created some problems for the federales in Washington who were trying to surveil to no avail.

Web Surfing

Tor is free open source software that lets you keep your internet activity private.

Cryptohippie is a paid service that is very robust and does a good job at protecting internet privacy.

Identity Cloaker is another paid service based outside the US.

Stop PRISM Surveillance

Using these basic tools for communication, for little time and effort you can stop the NSA perverts from spying on everything you do. You will greatly reduce the scope of surveillance of your personal life and hopefully help you get rid of that icky feeling of being watched by perverts. You must take control of your privacy if you hope to retain any.

The Best of Bill Rounds

Wise men visited the young Jesus, bringing gifts of gold, frankincense and myrrh. What if He wanted to sell those gifts later on to buy a donkey, feed the poor, clothe the naked, or buy a house? How would those first Christmas gifts, and subsequent transactions, be treated under US tax law? If you wouldn’t mind getting some gold or silver (or frankincense and myrrh) for Christmas, or if you are giving them, you might want to be aware of the potential taxes involved.

This article is a follow up to some previous articles on the Liberty Dollar case and the discussion about trading gold or silver coins that followed. Readers have asked me about the implications of the Kahre case, regarding trading legal tender gold and silver coins as opposed to privately minted gold or silver coins.

Jesus, Wise Men and Taxes

The facts set forth in the biblical account of the gifts of the Magi, along with a few facts and assumptions I throw in for good measure, provide a good hypothetical scenario for understanding the legal and tax consequences of trading goods, like gold, frankincense and myrrh, and legal tender gold or silver coins. For a more thorough understanding of the law regarding trading bullion, you might want to consult Pieces of Eight.

The legal and tax consequences of trading gold and silver are important to privacy. Privacy is freedom and gold and silver as money protect people from violations of fundamental human freedoms.

Transfer #1

…and when they had opened their treasures, they presented unto him gifts; gold, and frankincense, and myrrh.

Matthew 2:11

Here we have wise men giving very expensive gifts to Jesus. Let’s look at whether Jesus has any income taxes to pay from receiving these gifts and if there might be a gift tax owed by the wise men.

Income Tax Liability Of Jesus

There are no income taxes owed when you receive a gift. Fortunately, Jesus will not have to pay any income taxes on the gifts he received. However, since these wise men came from “the east” we will assume that they are foreigners. If any of Jesus’ gifts were worth more than $100,000, He will need to fill out Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. Its a good thing the gift is well documented to defend himself in case the IRS thinks Jesus might have unreported income.

Gift Taxes

The GIVER of a gift must pay a tax if they give someone a gift worth more than $13,000. There is an “exemption amount” that complicates this concept a bit, but for simplicity we will not address it here. Any one of the gifts worth more than $13,000 would cause the wise man who gave it, if they were subject to US taxes, to owe gift tax at approximately the same rate as his income tax (excluding any exemption amount issues). Maybe that’s why they didn’t stop by to see Herod on the way out of the jurisdiction.

Basis

It will be important to know what Jesus’ basis in the gifts are if he ever decides to sell them in the future. The basis is generally the amount the GIVER paid for the item. Lets assume that the wise men picked up their gifts at a store in Bethlehem right before they gave them to Jesus. Their basis (and subsequently Jesus’ basis) is the market value of the goods at the time they were bought (let’s say $285 for an ounce of each, the approximate spot price of gold 13 years ago, since I don’t have the spot price of frankincense and myrrh handy).

Now let us imagine that Mary and Joseph were pretty good parents and saved these gifts to present to Jesus at His Bar Mitzvah which is, in our hypothetical, this year. The day after his Bar Mitzvah, Jesus contemplates buying all kinds of nice things with the gifts the wise men gave him almost 13 years before.

Transfer #2

The gifts from the wise men are spent.

Capital Gains Tax

To calculate the gain, we take the difference between the fair market value of the item when spent, less the basis (essentially the original price paid). The price of gold has now risen to over $1,600. Lets also say that the other gifts have had similar gains.

When you recognize a gain on the exchange of an asset (like gold, frankincense or myrrh) for something else (another good, cash, etc.), a capital gains tax will apply. For most assets, the capital gains tax is 15% of the gain. Frankincense and myrrh would be taxed at 15%.

Higher Capital Gains Tax On Gold – 28%

Gold is different. Gold is specifically identified in the tax code, along with antiques, rugs, stamps, art and other collectibles, at a 28% capital gains tax rate. Jesus’ gain on gold, if exchanged for goods worth $1600, would be $1314 per ounce. Instead of paying 15% of this gain as a tax ($197 per ounce), He will have to pay capital gains tax at a rate of 28% ($367 per ounce).

This highlights a big reason why gold and silver are not regularly used as money, especially while they are appreciating in value. Capital gains tax makes gold and silver more expensive to use as money than other things that are less suited for being money, like frankincense and myrrh. He could get 13% more house if he trades frankincense or myrrh instead of gold.

Legal Tender Value Of Gold Coins

Some gold and silver coins are official US legal tender. Gold Eagles have a face value of $50, even though the value in Federal Reserve Note Dollars is much more. This has led some people to believe there might be some tax arbitrage.

One such individual was Robert Kahre, who paid his employees and independent contractors with legal tender gold and silver coins. He recorded the value of the transactions at the legal tender value on the coins, rather than the Federal Reserve Note value. In other transactions, such as purchasing a house, he declared the value of the coins at their Federal Reserve Note value.

There are numerous issues raised in the case, but if allowable, these types of transactions would have reduced reporting requirements, income taxes and a lot of other taxes for the participants. Kahre was ultimately convicted of tax evasion.

$1 ≠ $1

The state of the law is that a dollar does not equal a dollar. Thus we have the result of the Kahre case. It seems ridiculous to say that a dollar does not equal a dollar, but in order to avoid prosecution, it might be a good idea to record your transactions in legal tender gold and silver at the Federal Reserve Note Dollar value instead of the Gold Eagle Dollar value.

If Jesus traded a Gold Eagle for a fish-and-loaves dinner for 5,000, neither Jesus, nor the caterer should record the expense or income at $50. They should record the transaction somewhere between the fair market value of the coin or the food. The same is true if you trade a house worth $160,000 in Federal Reserve Notes for 100 ounces of gold with a “legal” tender value of $5,000. I’m sure the property tax assessor will tax you on the Federal Reserve Note Dollar instead of the Gold Eagle Dollar.

Challenge?

Some people may not be satisfied with this rule and may attempt to challenge it. There are certainly many facts that were not favorable to Mr. Kahre. For example, he paid individuals with gold and silver at one window, and just a few feet away at another window, bought back those gold and silver coins at fair market value for currency or other notes. A different factual scenario may have legitimate legal arguments to support the position and could lead to a different outcome, although I think it is unlikely.

Conclusion

Jesus would not have been taxed for the gifts he received from the Magi unless he traded them later for gains, at which point the tax on his gains in gold would have been significant. The Wise Men might have been taxed for giving a gift to Jesus. When dealing with legal tender gold and silver coins, it appears that in order to obey one law (the law as enforced in the Kahre case) one would have to disregard another law (the legal tender value of the coins) and report the Federal Reserve Note Dollar value instead. I can’t think of very many other instances of ridiculous outcomes in the law: a dollar is not the same as a dollar. I still prefer the gold ones.

Wise men visited the young Jesus, bringing gifts of gold, frankincense and myrrh. What if He wanted to sell those gifts later on to buy a donkey, feed the poor, clothe the naked, or buy a house? How would those first Christmas gifts, and subsequent transactions, be treated under US tax law? If you wouldn’t mind getting some gold or silver (or frankincense and myrrh) for Christmas, or if you are giving them, you might want to be aware of the potential taxes involved.

This article is a follow up to some previous articles on the Liberty Dollar case and the discussion about trading gold or silver coins that followed. Readers have asked me about the implications of the Kahre case, regarding trading legal tender gold and silver coins as opposed to privately minted gold or silver coins.

Jesus, Wise Men and Taxes

The facts set forth in the biblical account of the gifts of the Magi, along with a few facts and assumptions I throw in for good measure, provide a good hypothetical scenario for understanding the legal and tax consequences of trading goods, like gold, frankincense and myrrh, and legal tender gold or silver coins. For a more thorough understanding of the law regarding trading bullion, you might want to consult Pieces of Eight.

The legal and tax consequences of trading gold and silver are important to privacy. Privacy is freedom and gold and silver as money protect people from violations of fundamental human freedoms.

Transfer #1

…and when they had opened their treasures, they presented unto him gifts; gold, and frankincense, and myrrh.

Matthew 2:11

Here we have wise men giving very expensive gifts to Jesus. Let’s look at whether Jesus has any income taxes to pay from receiving these gifts and if there might be a gift tax owed by the wise men.

Income Tax Liability Of Jesus

There are no income taxes owed when you receive a gift. Fortunately, Jesus will not have to pay any income taxes on the gifts he received. However, since these wise men came from “the east” we will assume that they are foreigners. If any of Jesus’ gifts were worth more than $100,000, He will need to fill out Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. Its a good thing the gift is well documented to defend himself in case the IRS thinks Jesus might have unreported income.

Gift Taxes

The GIVER of a gift must pay a tax if they give someone a gift worth more than $13,000. There is an “exemption amount” that complicates this concept a bit, but for simplicity we will not address it here. Any one of the gifts worth more than $13,000 would cause the wise man who gave it, if they were subject to US taxes, to owe gift tax at approximately the same rate as his income tax (excluding any exemption amount issues). Maybe that’s why they didn’t stop by to see Herod on the way out of the jurisdiction.

Basis

It will be important to know what Jesus’ basis in the gifts are if he ever decides to sell them in the future. The basis is generally the amount the GIVER paid for the item. Lets assume that the wise men picked up their gifts at a store in Bethlehem right before they gave them to Jesus. Their basis (and subsequently Jesus’ basis) is the market value of the goods at the time they were bought (let’s say $285 for an ounce of each, the approximate spot price of gold 13 years ago, since I don’t have the spot price of frankincense and myrrh handy).

Now let us imagine that Mary and Joseph were pretty good parents and saved these gifts to present to Jesus at His Bar Mitzvah which is, in our hypothetical, this year. The day after his Bar Mitzvah, Jesus contemplates buying all kinds of nice things with the gifts the wise men gave him almost 13 years before.

Transfer #2

The gifts from the wise men are spent.

Capital Gains Tax

To calculate the gain, we take the difference between the fair market value of the item when spent, less the basis (essentially the original price paid). The price of gold has now risen to over $1,600. Lets also say that the other gifts have had similar gains.

When you recognize a gain on the exchange of an asset (like gold, frankincense or myrrh) for something else (another good, cash, etc.), a capital gains tax will apply. For most assets, the capital gains tax is 15% of the gain. Frankincense and myrrh would be taxed at 15%.

Higher Capital Gains Tax On Gold — 28%

Gold is different. Gold is specifically identified in the tax code, along with antiques, rugs, stamps, art and other collectibles, at a 28% capital gains tax rate. Jesus’ gain on gold, if exchanged for goods worth $1600, would be $1314 per ounce. Instead of paying 15% of this gain as a tax ($197 per ounce), He will have to pay capital gains tax at a rate of 28% ($367 per ounce).

This highlights a big reason why gold and silver are not regularly used as money, especially while they are appreciating in value. Capital gains tax makes gold and silver more expensive to use as money than other things that are less suited for being money, like frankincense and myrrh. He could get 13% more house if he trades frankincense or myrrh instead of gold.

Legal Tender Value Of Gold Coins

Some gold and silver coins are official US legal tender. Gold Eagles have a face value of $50, even though the value in Federal Reserve Note Dollars is much more. This has led some people to believe there might be some tax arbitrage.

One such individual was Robert Kahre, who paid his employees and independent contractors with legal tender gold and silver coins. He recorded the value of the transactions at the legal tender value on the coins, rather than the Federal Reserve Note value. In other transactions, such as purchasing a house, he declared the value of the coins at their Federal Reserve Note value.

There are numerous issues raised in the case, but if allowable, these types of transactions would have reduced reporting requirements, income taxes and a lot of other taxes for the participants. Kahre was ultimately convicted of tax evasion.

$1 ≠ $1

The state of the law is that a dollar does not equal a dollar. Thus we have the result of the Kahre case. It seems ridiculous to say that a dollar does not equal a dollar, but in order to avoid prosecution, it might be a good idea to record your transactions in legal tender gold and silver at the Federal Reserve Note Dollar value instead of the Gold Eagle Dollar value.

If Jesus traded a Gold Eagle for a fish-and-loaves dinner for 5,000, neither Jesus, nor the caterer should record the expense or income at $50. They should record the transaction somewhere between the fair market value of the coin or the food. The same is true if you trade a house worth $160,000 in Federal Reserve Notes for 100 ounces of gold with a “legal” tender value of $5,000. I’m sure the property tax assessor will tax you on the Federal Reserve Note Dollar instead of the Gold Eagle Dollar.

Challenge?

Some people may not be satisfied with this rule and may attempt to challenge it. There are certainly many facts that were not favorable to Mr. Kahre. For example, he paid individuals with gold and silver at one window, and just a few feet away at another window, bought back those gold and silver coins at fair market value for currency or other notes. A different factual scenario may have legitimate legal arguments to support the position and could lead to a different outcome, although I think it is unlikely.

Conclusion

Jesus would not have been taxed for the gifts he received from the Magi unless he traded them later for gains, at which point the tax on his gains in gold would have been significant. The Wise Men might have been taxed for giving a gift to Jesus. When dealing with legal tender gold and silver coins, it appears that in order to obey one law (the law as enforced in the Kahre case) one would have to disregard another law (the legal tender value of the coins) and report the Federal Reserve Note Dollar value instead. I can’t think of very many other instances of ridiculous outcomes in the law: a dollar is not the same as a dollar. I still prefer the gold ones.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

The issue of camera cell phone privacy is extremely important in today’s age and far-reaching. Many cell phone cameras by default and automatically reveal tremendous amounts of information such as the physical location of a picture, time, date, cell phone model, etc. Additionally, a number of phone companies and facilities along with laws and implementations have increased so much in recent times that it is often difficult to keep up on what privacy protections you have.

Begin with checking the kind of subscriber information you are providing to a company for services. Some employees and hackers have a tendency of using such private information for nefarious purposes. You might use a ghost address. A pre-paid cell phone or SIM card can greatly increase your cell phone security and privacy. A super ninja trick would be to use a pre-paid wireless service paid for with bitcoins.

Some networks give you the option of recharging your phone continuously without asking you for private information. But this habit may not be most effective if you change your pre-paid connections often in order to maintain privacy and escape notice of any miscreant. For example, you could use a Google Voice number, although anything with Google may be problematic for privacy concerns, to forward to your mobile phone number and then you could get different SIM cards every few months.

Many phone numbers are easily available in telephone directories or transactional databases. Every time you give your number to a company chances are that they are recorded, databased and archived. These numbers are vulnerable because often criminals might use the number in order to create a completely false profile with the information and is another reason to keep your phone number private. Cleaning up from identity theft can be time consuming. Additionally, if the company has no valid reason to know your phone number then you could decide not to provide one or provide one which is not actively used.

In countries like the USA it is easy to block your caller ID details. Call forwarding or call screening, a service provided by Google Voice, is another excellent option to avoid callers who will disturb you and your privacy. With Google Voice you can even block numbers. These are great ways to protect your cell phone number.

Your location is an integral way in which you can easily be tracked. Make it a point to turn off the GPS navigation system or WiFi which decreases the probability that your physical location may be tracked. Prevent your phone from being too clogged up with data. From time to time it is a good idea to get delete messages, call records, contacts, files, etc. Then should you lose your phone anyone who finds it will not be able to access as much information and therefore you will be less vulnerable to all those who are seeking to expose your privacy.

If you take pictures with your cell phone and post them online then this can expose your camera cell phone privacy because often the physical location is encoded with the picture file. For example, the EXIF file may contain information such as when the picture was taken, what kind of phone model and if your cell phone has GPS then the coordinates.

Last but not the least, make sure that you do not stay away from your phone too long because you may never know who may access it. And, of course, password protect it!

Cell phone privacy is very difficult to attain. Protect as much of your confidential communications using your cell phone or smart phone as possible. Check out the book How To Vanish or the Basic Privacy Guide for more tips on taking control of and protecting your privacy.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

The San Diego Police Department has finally done it! They get their shot at having the highest incarceration rate in the world. But not among the residents of San Diego, among the ranks of the SDPD itself.

Police Corruption Means High Percentage Of Police Are Criminals

The SDPD currently has 11 officers out of 1,100 patrol officers under criminal or internal investigation. The alleged police corruption ranges from drunk driving and harassment, all the way to domestic violence, sexual assault and rape. That is a solid 1% of the police. If they play their cards right and all 11 get locked up, the SDPD will have about the same incarceration rate as the general US population! That gives the SDPD a solid chance to take sole possession of first place very soon.

SDPD — Higher Percentage Of Criminals Than Any Other Population In The World

Having a higher incarceration rate than the general US population is quite an accomplishment. But, given the fact that the US has the highest incarceration rate in the world, the SDPD has a solid chance of taking sole possession of first place very soon. The closest competitor is Russia with a .6% rate, a mark that the SDPD are very likely to beat, even if all the criminal officers aren’t incarcerated.

Personal Information Available To Criminal Police Officers

So what are innocent people to do when the boys in blue are just as likely to be a criminal as anyone else off the street. Is your information really protected when access is limited to law enforcement riddled with police corruption? Your internet activity, phone records, phone location, bank records and lots of other information are searchable by law enforcement. And what about the information that you are required to give law enforcement, like your name, address, drivers license, etc.?

Protect Personal Information From Police Corruption

There are lots of ways to limit or protect your information from falling into criminal hands, no matter what uniform they are wearing. Proxy servers or VPNs based in another country keep your internet searches out of the jurisdiction of domestic authorities. VoIP phone services based in a foreign country can minimize the phone records available to law enforcement without a warrant. Removing the battery of your cell phone keeps your location from being tracked. You could also bank in a foreign jurisdiction to increase the costs to law enforcement of searching your bank records. You could even go so far as getting a foreign drivers license so that you reveal less of your sensitive information, like the address where you stay in the US, to the 1% of the police officers that are criminals.

Record Police Corruption Without Violating The Law

It is also important to note how modest the record breaking police are about having their picture taken by admiring fans. Sometimes amateur camera men are arrested and charged with a crime, usually for recording a cop without their consent under wire tapping laws. CopBlock.org is full of these kinds of encounters. Getting charged with a crime has a huge affect on your personal privacy.

A few states require you to get consent from everyone involved before you can record a conversation. Through some extreme distortions of these wire tapping laws, and with the help of prosecutors and judges who possibly aid and abet police misconduct, prosecutions for filming cops are possible, although relatively rare.

It cannot be helped that some people, like Rosa Parks, will violate unjust laws in protest. Others who do not want to risk prosecution can avoid breaking the law and still contribute to protecting liberty.

Don’t Record Sound When Recording Police

To help prevent violation of a grossly distorted understanding of wire tapping laws, don’t forget to take your special Cop Cam that does not record sound. Since most wire tapping statutes require you to record a conversation to violate the law, if you don’t record the sounds of a conversation, you probably won’t be guilty of a crime. The individual facts of each situation will be important for your attorney before they can give you legal advice on the matter.

Conclusion

When the authorities are more likely than anyone else in the world to be a criminal, it is important to protect as many of your rights as possible. It is your right to protect as much of your information as you legally can. Using these tips, and others in the book How To Vanish, you can legally prevent the police from gathering more information than you are legally required to provide. And you can prevent violating any laws when you are trying to contribute to helping the police set a record for the number of criminals in their ranks.

If you know of great offshore VoIP services, countries where it is easy to get a drivers license without sharing a lot of information, or other helpful tips to share with other readers, leave a comment about it!

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

Secret Weapon To Protect Medical Privacy

Medical information is among the most private personal information. New healthcare laws in the US essentially require doctors to make all of their records electronic and store them in government databases. This poses a serious threat to patient privacy rights. There is one way to find private hospitals where your information will not be entered into US databases and you may even get better health care for much less.

Risk to Patient Privacy Rights

Having detailed medical information housed in one massive database makes it one of the most lucrative targets for hackers. It will not only contain health information (potentially worth its weight in digital gold to the highly ethical pharmaceutical industry), but it will also include demographic information, like race, ethnicity, primary language, and gender. This information is golden to marketers. And that says nothing of its value to identity thieves.

Government databases are well known as extremely poorly protected. They aren’t even capable of protecting classified and top secret material. I hate to think how well they will protect our medical data. It may only be a matter of time before our medical histories are public information.

There Is Bound To Be Abuse

The law permits use of the data for clinical research, even if the subject objects to the use of their data. North Carolina sheriffs have already asked to browse prescription records to look for potential pain medication abusers. With even more data available, who knows what kinds of crimes they think your medical records might be evidence of.

About 12 million people will have to have access to such a health system, from heart surgeons to grocery store pharmacists. It is inevitable that one of those 12 million will be able to accidentally or purposefully leak massive amounts of data.

And, if the US social services system becomes anything like the UK system, the government will be able to take away people’s kids for being overweight or for a learning disability. Having all medical records searchable means that many more innocent people with unfortunate genes could be the target of overzealous social workers.

Protect Patient Privacy Rights

To prevent medical procedures or conditions from showing up in US medical record databases, use offshore medical facilities. Seeking treatment in private hospitals in other countries is often called medical tourism and can be far more beneficial than just protecting privacy. Many hospitals in places like New Zealand, Thailand, India, Mexico and Costa Rica, cater to wealthy foreigners. In many cases the doctors are trained in the US. They offer as good, or better, health care than any US facilities and they are usually 50% to 90% cheaper, including all travel expenses like airfare and hotel.

Risks

Before seeking medical care abroad, be sure to do extensive research. Although some private hospitals may cater to wealthy travelers, not all hospitals in those countries will be the same. Some will offer substandard care in unhealthy facilities.

Most other countries will not protect patients from medical malpractice, like they do in the US, and pharmaceutical companies may not be liable for injuries from medications like they are in the US. Also, medical information in foreign countries may not be protected as private.

Protect Yourself From Risks

There are several companies that help arrange offshore medical visits to make sure you select the best facilities and doctors. There are also voluntary organizations that certify medical facilities such as the JCI to promote quality care. A considerable amount of research should be done before seeking medical treatment away from home.

Conclusion

Seeking medical treatment abroad can help protect patient privacy rights. Information about those visits will not be automatically entered into the US electronic health record database. Additionally, seeking care offshore can be far less expensive, it can be as good, or better than US care, and you may even have access to many treatments, drugs and procedures that are not permitted in the US. Don’t forget to check out the book How To Vanish for more ways to protect your privacy.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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We Are All Going To Die!…Someday

When we die the court system will take control of our financial lives and make one of the most private aspects of our lives public. This loss of financial privacy will happen unless we take one simple step to protect ourselves, our assets and our families with a living trust.

Probate is the Problem With Financial Privacy

When people die they leave behind some stuff (hopefully). Most people have a will, if they have anything at all, to determine who gets all of their neat stuff. To administer this process, for people who do or do not have a will, the courts take control of all the assets, make sure all the money goes to the right people, and make your will a part of the public record. This is called probate. Anyone particularly interested in learning what your kids got will be able to find out very easily. Some courts even make the information available online. This is a huge blow to financial privacy.

Living Trust

The only way to avoid having so much of your private financial life displayed for the public is to prepare a living trust. A living trust allows you to maintain control over your assets while you are alive, avoids the public probate process to distribute assets when you die and maintains your financial privacy.

There are some other great benefits as well. Compared to the cost of administering a living trust, probate is expensive. The cost is based on the value of the assets that the probate court deals with, so the more money you have, the more it will cost you. Probate is also slower.

Don’t Get Hit By A Bus

What happens in the unfortunate event that you are hit by a bus and turned into a vegetable? Whether or not you have a will, your assets are going to sit around and can’t be touched. They can’t be used to pay your medical expenses, they can’t be used to pay your mortgage, they can’t be used to pay for the groceries of your stalwart spouse. This can pose a very bad problem when assets exist to pay those costs, but you are incapacitated, covered in bandages and unable to get at those assets.

With a living trust, the unfortunate bus incident will not leave your assets untouchable until you die. The trustee can use the assets to pay for expenses while you are still alive but unable to manage your own affairs. This makes sure that the family members who are diligently at your hospital bed side can pay for the things they need, hopefully balloons and get well cards.

Living Trusts Are Common

The cost of having a basic living trust prepared is relative to its complexity. If your financial situation is simple, they can be quite inexpensive. If your financial situation is more complex, it will be worth the cost and effort to draft an adequate living trust. Many attorneys are able to prepare them and make sure they are properly funded.

Conclusion

The legal system still contains several tools that help ordinary individuals protect their financial privacy. Having a living will is one of the great ways to take advantage of that system. Living wills provide a private alternative, to public indignity. Check out the book How To Vanish for more legal tools to help protect your privacy.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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Identity theft occurs more often than anybody would like to admit and effective privacy techniques could prevent much of the damage. Everyone has a mentality of “it won’t happen to me”. Unfortunately, it can and it WILL to those who don’t follow precautions.

And when it comes to identity theft, you can never be TOO cautious. Always go that extra mile to protect your personal information. It can even happen at a corporate level if a consumer database is hacked. For this reason, you should only provide your credit card information or social security number to agencies with advanced privacy techniques.

Here are seven privacy techniques and tips on how you can reduce your risk of having your identity stolen:

1. Be extremely cautious when asked to provide your social security or personal identification number. Always ask an organization what type of security system they have in place to protect such information from getting out. You never know who will have access to the data when you are not around.

2. Be wary of emails from “banks” or “companies” asking you to verify your personal information. Hackers will try to make it seem like an email really is from your bank or a company with which you are affiliated. They will try to tell you that there is something wrong with your account and that you need to click on the link in the email to verify some information. NEVER DO THIS!

If you are unsure whether or not the email is legitimate, call the company, or manually enter the company’s website URL in your browser. DO NOT login by clicking on the link in the email.

3. Don’t just carelessly toss important papers into the garbage. Some thieves are so desperate that they will actually go through dumpsters in search of personal data. These items include ATM receipts, credit card offers, bank statements, utility bills, and so forth. To prevent them from being stolen, put them through a paper shredder. Or better yet, use a secure ghost address.

4. When paying with a credit or debit card at a restaurant or store, make sure you can actually see the cashier swipe it in the machine. Although they risk getting in a lot of trouble, some employees try to swipe cards into a fraudulent machine that captures the information. While you’re at it, ask for a receipt. Better avoid merchants like Stratfor who could have protected customer information by accepting BitCoin but did not.

5. Sometimes thieves will try to demand personal information from you via the phone. Phishing scams aren’t just limited to the internet. When you receive ANY type of phone call during which the other person wants you to provide them with private information, do not agree to it. They might even try to sound as if they are professionals of some sort.

The only time you should consider giving private details over the phone is if you made the call yourself, and you know you got the right number.

6. As sad as it sounds, some scammers will try to say they are with charity organizations. They will try to make you feel guilt for not donating. If you’re unsure about whether or not they are a real charity, tell them to contact you another way. Tell them that if they are serious, then they may send you a pamphlet through the mail, and that you will send your donation in the form of a money order.

7. Most identity thefts occur whenever somebody loses their wallet or purse. If you lose any personal information such as your social security card, birth certificate, ID, credit card, debit card, check book, cell phone, etc.., IMMEDIATELY notify the relevant institutions and banks. If any of the information is stolen, notify the police as well.

Hopefully, you now have an idea of what privacy techniques you can implement in order to prevent identity theft. Keep these tips in mind and remember: ALWAYS go that extra mile to protect your personal information by implementing stealth tactics from How To Vanish The Book or The Mini-Guide To Personal Privacy.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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I have been fascinated recently with the Washington Post intelligence analysis by William Arkin and Dana Priest. Both are well known journalists who have covered the military and intelligence communities for many years. Realizing that something had changed after 9/11, they dedicated two years to investigating what the intelligence community had evolved into.

They first dug up the location of as many Top Secret facilities, both government and private, as possible. Then took somewhat of a guided tour, gaining access to several high ranking officials inside the Top Secret intelligence community to explain and clarify what each agency does and how they do it.

What They Discovered

Almost everyone is amazed when they see the creatures the government had created not only in size and scope, but in the amount of waste, redundancy, cost and ineffectiveness. There are 45 different government agencies with 1,271 subdivisions, all involved with intelligence. More than 2,000 private companies with government contracts provide some service to Top Secret agencies. In total, there are over 850,000 people nationwide who have Top Secret clearance working on intelligence gathering, analysis, support, implementation, etc. The massive size and scope of the intelligence community is larger than it ever was during the cold war and is directed as much at targets within the US as at targets abroad for the first time. They really have spared no expense. The US intelligence community has effectively become the u201Cfourth branch of government.u201D

The Post is clearly more shocked about the size and inefficiency of the creatures which have been created. I am more concerned with how dangerous these creatures inherently are and how difficult they are to control by their very nature.

The Real Danger Of The Intelligence Community

The Washington Post fails to point out the most dangerous part of this scientific marvel that has been created. The judicial branch cannot act as a check on the intelligence community because judicial review is not required for almost any intelligence operations. Subsequent prosecution for any illegal conduct is nearly impossible because of the Top Secret nature of the evidence. The legislative branch requires no accountability or measures of success to check and balance the intelligence community with funding restrictions. The directors of these agencies, appointed by the executive branch and confirmed by the legislative branch, have admitted that the system is beyond their control. Like a more dangerous version of Jurassic Park, these intelligence agencies are vicious creatures which have been animated, have escaped from their cages, and are taking over the park.

The intelligence community was so preoccupied with whether or not they could build such a surveillance system, they didn’t stop to think if they should. The fourth branch of government is the most dangerous branch regardless of whether this surveillance and dataveillance of citizens is justified or not and whether it is effective or not. The sheer power and scope of this system allows unprecedented power over the lives of individuals. Should someone in any of these agencies want to exert control, no matter what the reason, the lack of accountability and lack of supervision makes it possible.

Intelligence Analysis Is Dangerous To Innocent Citizens

This kind of organization, without control or accountability, attracts sociopaths. Even if the intelligence agencies are benevolent in purpose, and even if their function is benevolent for a period of time, they will become infested with voracious velociraptors. Imagine the Corleone family having just one database administrator in their pocket. The inherent goal of anyone gathering this data is to manipulate it, find patterns, and prove those patterns to be correct. These vast collectors of information don’t want to be fed, they want to hunt.

There will be no way for innocent people to protect themselves from being devoured alive because US law prohibits citizens from protecting much of their important financial and personal data. For example, the census is a mandatory disclosure of information. It is likely possible to re-identify 87% of the census responders who thought they were anonymous. Where disclosure of data is not required by law, private companies, which are regulated by government entities, are coerced into divulging information about their customers upon request by the government with a national security letter.

Geography Irrelevant For Intelligence Analysis

The Post focuses on whether the intelligence community is too big to be effective, a legitimate concern. They also focus on the geography of the intelligence community. Geography is irrelevant when it comes to dataveillance and data aggregation and analysis. The most important information tracked by these intelligence agencies is digital. Digital info exists simultaneously in as many places as you want it to exist. Your bank accounts and financial accounts are just a bunch of digits in an electronic database. Your identity is just a few characters and numbers in an electronic database. These velociraptors do not need geography to feed on your data and they don’t need geography to hunt you.

How You Can Escape The Park (Sort Of)

Since Top secret America is most concerned with data and information, one of the most effective ways to avoid being devoured by the dinosaurs that have taken control of the park is to control the data and information that is traceable to you with Freenet. Freenet is an open source (that means free) peer to peer network which allows you to post information to the network completely anonymously and acquire information from the network completely anonymously. It will cost anyone, including the intelligence community, millions of dollars per person to link information with identity on Freenet. It will only cost users of Freenet a few minutes in time to anonymize that data.

There are even more robust tools in Freenet which allow you to create a network among only trusted individuals. This creates even more protection against the intrusive eyes of an out of control ministry of information. It is one of the ways that Chinese, Iranian and other citizens of closed societies are able to communicate ideas and information without retaliation from their most vicious predators. This prevents any tracking of information to you unless a warrant is served to search an individual computer.

Conclusion

The Washington Post has done an excellent job discovering the scope and size of the intelligence community that poses a greater threat to Americans than Hitler, Russia, or Osama ever did. If defeating the threat of Hitler, Russia, or Osama was made easier by using Freenet, would you use it? Surveillance of citizens by government, surveillance of customers by corporations, private transactional databases, government transactional databases and other forms of search without a warrant are dangerous to a free society. Also, be sure to check out the new Privacy Tools and Resources page posted on How To Vanish that contains several intriguing videos about your privacy.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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Free speech is threatened when corrupt forces can pressure the means of distributing speech. Corrupt governments all over the world, or corrupt elements within governments, use the methods at their disposal to silence uncomfortable speech. One of the main methods they use is to threaten the source of speech.

Anonymous speech is important, even for more mundane reasons than scathing political criticism. Advocates of medical marijuana, proponents of evolution, gay rights activists, critics of local police, and many others may need the protection of anonymous speech to protect themselves while they voice their opinion. Efforts to censor online speech are doomed to fail because people will find ways to publish unflattering material online without leaving any trace of identity behind.

To publish a website, there are several points of weakness where identifying information could be gleaned. Political activists and whistleblowers will be able to easily circumvent identity requirements at each one of these points, allowing them to anonymously publish material online with an anonymous website.

Anonymous Website Domain Name

A website needs a domain name (one of those .com things) which must be bought and paid for through a domain registry like GoDaddy. Most domain registries allow people to protect their identity by using a domain registration proxy. Using these proxies is not sufficient to protect identity because identifying information must still be shared with the proxy, which can be pressured to reveal it.

To prevent the domain registry from revealing their identity to anyone, political activists will simply enter pseudanonymous information, like Publius or Silence Dogood. If they are really sneaky they may even enter the information of a competitor to register their domain or use an anonymous domain registrar.

Anonymous Website Payment

An important link in the chain is payment for services. Even if a pen name is provided, the person paying for the domain name could easily be tracked down by ruthless government officials by tracking down the source of payment, making an anonymous website less anonymous. To avoid leaving an audit trail back to their own financial accounts, political journalists may pay for their domain name with a money order paid for in cash, use a prepaid credit card (which they paid cash to acquire) or pay with Bitcoins. There are several companies that offer domain name registration for Bitcoins. If they send payment from a Bitcoin address that has not been published anywhere else, it will be hard to trace payments to them.

Anonymous Email

Domain registrars need to communicate with owners to provide information, remind them about renewals, and other things. Most of that communication is done by email. Whistleblowers will easily be able to set up an anonymous email address with any free email service.

Anonymous Website Hosting

Another critical part of maintaining a website is a server to host the website. Most websites are hosted by a web hosting company. As with domain registry, activists will use pseudonyms and anonymous email addresses to create their accounts to host their politically sensitive websites. And, they will pay with cash, prepaid credit cards or Bitcoins for the web hosting service.

Anonymous IP Address

As an extra layer of protection, anytime smart political dissidents connect to the domain registrar, set up or log into their email, connect to their web hosting company, or log into their website to post information, they will use anonymous web surfing techniques. Tor is free and easy, proxy servers are available all over the world. VPNs, especially those based offshore, will prevent authorities searching through service provider records from discovering the IP address of political activists. These methods are also a way to circumvent government blocked sites, a common practice in places like China.

Continuing Threats

Even if a clever political critic takes all of these measures, they are of course still subject to censorship from corrupt pressure on service providers to cut off service. The domain could be seized by government officials or the web host server could be confiscated.The activist themselves would still be protected, and they would be able to republish their information in other locations.

Even in the absence of legal action, a domain registrar, or a web hosting company can always be pressured to take information down. Offshore companies in jurisdictions that are unfriendly to the criticized government may be harder to pressure.

Conclusion

Free speech and the ability to dissent is threatened by censorship that results from threats of imprisonment, violence and assassination. Those threats are less effective to prevent people from publishing on the internet when people can easily publish information completely anonymously. For more techniques on protecting anonymity, check out the book How To Vanish and the upcoming report for political activists on Anonymous Internet Publishing.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

One of the most invasive legal tools in the US is the subpoena. Its not just several pages of headache inducing legalese. It is a court order, demanding you to comply with whatever expensive command is gracing its pages. It might ask you to reveal more about your business than you would like your competitors to know. It might reveal embarrassing personal information.

A subpoena doesn’t even need to be signed by a judge. A court clerk, prosecutor, or a private attorney can issue a subpoena to gather information.

The worst part is that you don’t even have to be involved in a criminal or civil case to get served with one. All you need is to have possession of some record that is remotely likely to contain information relevant to a case or investigation. In the law we call those kinds of requests “fishing expeditions.”

Not everybody likes fishing, especially the fish. There are ways to protect your privacy and protect the privacy of your customers from an invasive subpoena with a few simple tips.

Types of Subpoenas

There are 3 basic types of subpoenas. One will ask you only to produce records. Another will ask you to appear in person and testify. The third will ask for both. These tips are geared towards the first, producing records, but may help for the other two as well.

How likely are you to be served with a subpoena? Everyone’s situation will be different, but when you look at how many lawsuits are filed every year, and think that there are probably a handful of subpoenas issued for each lawsuit, the chances are pretty high that you or your business will get one at some point. Every year, much more information is gathered from subpoenas than from wire taps.

Who do they send the subpoena to?

It can be directed to you, ordering you to produce records that you possess about yourself or about someone else. It can also be issued to someone else to get records they have about you. Sometimes a third party will notify you if your records have been subpoenaed, but many times, you will not have any notice at all.

What can they get with a subpoena?

Either you or a third party are ordered to produce just about any record that is kept. There is no need for probable cause, all they need is some reasonable belief that there might be evidence in the records requested. Those records include anything like customer orders, invoices, repair reports, subscriber lists, contracts, memos, meeting minutes, and lots of other things.

There are a few things that you don’t have to produce. Privileged material, like communications with your lawyer, remain private. Also, things like emails, text messages and voice mail require a higher standard for law enforcement and opponents to collect. A subpoena can still get a list of the numbers you dialed, the websites you visited and lots of other information that could lead to more evidence anyways.

What do you do if you get a subpoena.

Step 1.

Take the paper and close your door or walk away. Don’t say anything to the person giving it to you, don’t invite them in, don’t read it in front of them, don’t buy them a beer. Just take it and get to a phone.

Step 2.

Call your lawyer. You can challenge a subpoena in court before you have to produce anything. If its too broad or burdensome to comply with or if it seeks privileged material, you might be able to limit what you have to produce and you may even be able to quash it completely. You can even challenge a subpoena received by a third party if any of your own records would be disclosed, assuming you know about the subpoena in time to challenge it. A lawyer can also help make sure you limit the documents you produce to the bare essentials. You don’t want to waste time and money disclosing more than you have to.

Step 3.

Don’t Ignore it. You could be held in contempt if you do.

Prevent Disclosure of Records From a Subpoena

Keep as few records as possible. If you don’t have it, you don’t have to produce it. The more records you have, the more likely it is that you have something that someone else wants.

Have a clear document retention policy and stick to it. If you are selectively destroying a few records here and there, it might look like you are trying to hide evidence. Never destroy records after a subpoena is issued or even if you think one might have been issued. That is a big no no.

Make Fewer Records Yourself

Since third parties can be compelled to disclose details about you, and since you may not always know this with enough time to challenge the subpoena, you should limit the records that other companies and individuals have about you.

Be as anonymous as possible to other companies that might be making records with your information. Use proxy servers, Tor, VPNs, Startpage, prepaid cell phones, pay for things in cash, and many other techniques from the book How to Vanish. This way, even if third party records are disclosed, they do not immediately identify you.

Retain Less Data

Even if you collect some information about customers or yourself, you can eliminate unnecessary data on a regular basis according to your written data retention policy. Securely delete old files, anonymize marketing data, delete emails, wipe old hard drives, use encryption to store and send files, and clear your browsing history. And don’t forget the old fashioned technique of shredding your trash.

Use Offshore Companies

Records of companies outside of US jurisdiction are harder to reach by simple court processes. Some countries, like Panama, are known for flagrantly disregarding US court orders. If you want to protect your records, use foreign companies. You can get email (like Hushmail), VPNs (like Identity Cloaker), and a lot of other services from foreign countries.

Conclusion

All of these measures don’t mean that you will never be served with a subpoena. It means that if you are lucky you can respond with the glorious “certification of no records. “ But it will still be a win if you can reduce the number of records that you have to produce from millions down to dozens. It is a lot easier, less expensive and will protect more privacy. Check out other ways to reduce the records that you make and keep with the book How To Vanish.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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Taking some measures to pre-vanish can be very helpful to vanish at a later date. This means having in place the tools that you need to vanish long before you actually need to use them. This can be particularly helpful if you will be spending some time in the near future in a repressive regime that does not recognize the basic human rights of freedom of speech, freedom of association, and privacy related rights. Once domiciled inside a controlling regime, it can become more difficult to acquire the knowledge and skills needed to live a private life. You may no longer be able to purchase How To Vanish The Book directly, but it can be done. You may also need to seek other jurisdictions to maintain your bank privacy.

How Cubans Use Anonymous Web Surfing

Communist Cuba is a great example of how this is being done. It has a thriving market for goods and services, even though strict regulations prohibit entrepreneurship, because the citizens find ways to exercise their enterprising minds. A site similar to Craigslist, called revolico.com, allows Cubans to exchange everything from baseball equipment to their place in line and they love their hawaladar. For the good of the people, the site is blocked by the government. But the site thrives nonetheless. How do the Cubans get around the repressive and immoral policies of their overbearing government? They use anonymous web surfing practices.

Anonymous web surfing is generally done by using proxy servers. Proxy servers allow the proxy computer, outside of Cuba and not subject to Cuban government regulations, to do the web surfing for the Cubans. The ISP registers that they have visited the proxy server, not the sites visited by the proxy server on their behalf. And, because there are many thousands of servers available at any moment, some of which have never been used before as a proxy, it is far more difficult to restrict access to proxy servers than to individual websites. This way, the web surfing activity of individual Cubans is made anonymous to those who are watching them.

Cubans using anonymous proxy servers for anonymous browsing which don’t disclose their IP address to the websites that they visit, nor the fact that the proxy server is even surfing for someone else, make it that much harder for a repressive government, like Cuba, to discover which citizens are visiting a site and then prevent them from visiting the site.

Conclusion

Cuba is not the only example. China, Iran, and many other countries have seen their citizens utilize proxy servers to spread information and ideas. I am sure that governments are not done trying to prevent their citizens from accessing information, sharing information, or associating with others through the internet, but I am also sure that there will always be those who circumvent limitations placed on them through the use of anonymous web surfing techniques. Some people might want to seek residency in another country that is more free and allows for more privacy.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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We have all done it. If you own a laptop then you have probably done it more than once. We have all been without the Internet for a little while and then decided to use the wireless network unprotected with cryptographic protocols from our neighbor, a business, or a stranger down the street to do a little web surfing.

But just because you have done it does not necessarily mean that you want others doing it to you. After all, some of those restaurants offered the Wifi access for free to entice you to be their patron while your neighbor may just be being nice. But you may not trust others as much as you trust yourself.

For whatever reason you want to keep all strangers out of your network, just like you want them out of your financial business and may use a hawala system, and would help you to avoid private investigators. This is how to keep your network secure from any prying eyes that may be around your neighborhood.

CRYPTOGRAPHIC PROTOCOLS

First, is to make sure that you pick the right encryption method for your network settings. The instruction manual with your wireless router should provide step by step instructions that are unique to each device.

There are several different cryptographic protocols that are available for someone running a home network. The choices are WPA, WPA II, and WEP. The WPA and WPA II are both the same standard and version II is slight more advanced than the regular version. These are known to be the safest method of network encryption. They will keep your network reasonably safe against people that are trying to penetrate it.

If you have older hardware, instead of a new secure Linksys router, then you might go with WEP. This is not very secure but it is better than nothing. WEP is an older standard of cryptographic protocols. If it is at all possible then choose another method of encryption. You will be safer in the long run.

Second, is to make sure that your login information is very hard to guess. Your network key, as well as your router login information, should be very complicated. If they are easy to guess then this makes all of the other security that you have placed on your wireless network pointless. Do not use a password that is easily identifiable to you. This means do not use your dog, cat, or even children. All these things are something that a neighbor would know. Remember the easier your password is to guess then the less secure your network is.

CONCLUSION

Encrypting your wireless network with cryptographic protocols will keep unknown and unwanted individuals from using your assets and help you to protect your computer. These methods will help keep you and your personal information safe and secured. Then you can surf the Internet or setup storage devices, etc. with relative peace of mind knowing that they are not available to anyone who drives by with a laptop. You can further protect your computer by using anonymous web surfing and other techniques and tools found in the book How To Vanish.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

Loans are always a good way to expose your sensitive information to a host of strangers who are scrutinizing every aspect of your life. There are more likely than not more eyes than those of a pecuniary predator perusing the information you submit to your lender. Although borrowing money often feels like placing the burden of heavy chains around your neck, how much worse would it be to be naked under those chains?

I have recently read a Privacy Disclosure Policy used by many lenders, and typical of the industry in general, which inform their borrowers of what will happen to their personal information once it is gathered by the lender. It is very likely that if you apply for a loan, or if you have applied for a loan, the same or similar language is used to the same effect in your agreement. The document is enlightening as to how much freedom lenders have in disclosing private information to third parties.

What Information is Gathered and Shared

Don’t you love the Patriot Act? There is little secret that the Patriot Act has required businesses and individuals to disclose more information than ever before to the government for so-called law enforcement purposes. The information that is required under the Patriot Act is extensive, from all bank account activity to employment records and all credit activity. The list is longer but it is safe to say that it is very extensive. In order to comply with the Patriot Act, banks, lenders and a host of others must gather this information from the individuals with whom they transact.

Your Consent is Not Needed

The disclosure states “We are required to or we may provide information about you to third parties without your consent, as permitted by law…” As broad as this statement is, it is followed by a list stating only examples of entities who may receive the informatio

Although the list is limited to credit agencies and law enforcement, two types of entities that most borrowers would expect to have their information disclosed to, there is no actual limit to what entities may receive this information. What is permitted by law may limit to some degree what information may be shared without consent, but the protection of the law is unreliable since both president Bush and Obama have authorized the use of warrantless wiretapping.

How Third Parties Might Acquire The Information

The policy also states “From time to time, we enter into agreements with other companies to provide services to us or make products and services available to you. Under these agreements, the companies may receive information about you…” The breadth of this clause places essentially no limits on who may later enter into an agreement with the lender and obtain your information for almost any purpose.

The policy further reads, “…we may provide information about you to our service providers…” That which is disclosed to service providers is limited to “that which we deem appropriate” for them to carry out their functions. This essentially limits what they can disclose to what they want to disclose, but no more. Also, the definition of service provider seems to include everyone from the phone company to auditors and possibly even the janitor.

The lender may also “provide information about you to our service providers to help us perform marketing services.” Marketing services and others within the “corporate family of offices” may also receive “all of the categories of information we gather about you.”

Thus, any related company and, if the lender hires a marketing firm, the marketing firm may now have all of your sensitive information, with no assurances as to how the marketing firm may use the data. Coupled with the sweeping language of the rest of the “Privacy” policy, there are few limits to what can be done with your private information once you have given it over to your lender.

Opt-Out

Most people will have to borrow money at some point or another during their lives. There are a very select few who can pay cash for a house and not many more who can get a private loan from their rich uncle which are not subject to the disclosure requirements of other loans. If you do have to get a loan, look for an opt out clause.

Ask your lender where the clause is specifically and make sure that you are taking the proper steps to execute this part of the agreement. An opt out clause is only like putting a band-aid on a gaping wound, but it is better than nothing and will allow you to opt out of the sharing of as much information as possible to third-parties.

Conclusion

The best case scenario is that you will be bothered with a host of annoying, unsolicited marketing, even if you opt out. The worst case scenario is that your sensitive information will be compromised due to the prolific sharing that may occur after your lender has gathered your information.

The best thing for protecting your privacy is to avoid borrowing money. Easier said than done, I know. Because the majority of people will have to borrow at some point, the next best thing is to at least opt out of unnecessary disclosures. Whenever signing any borrowing agreement, you should seek competent representation to review your specific agreement. Look for similar language in any Privacy Policy related to your loan to try and become aware of the potential risks you face in borrowing.

If you want to create a complete strategy for protecting your privacy, get the book How to Vanish.

Disclaimer: This is not intended to be legal advice. Always seek the advice of competent legal counsel when reviewing or entering into any agreement or legal relationship.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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What What Happens If You Use A Fake Name On Google+ Or Facebook?

People love Facebook. Social networking is just a part of what humans do, so the fact that people use online social networks like Facebook and Google+ is no surprise. They are powerful tools for social change, business opportunities and developing strong relationships with friends and family.

But, people are nervous about providing their personal information to social networking sites, and with good reason. Social networking sites sell your information to the highest bidder. They make billions of dollars from the information that we give them for free. That information allows repressive governments to easily target undesirables, it could damage a career, or just plain cause embarrassment.

How People Protect Personal Information On Social Networking Sites

To harness the power of social networking while protecting personal information, some people use fake information in their profiles. There are lots of reasons people provide fake info. Everything from using a fake birthday or city, to using a fake profile picture or name are used by people who fear stalkers, by Egyptian revolutionaries, and by average people to protect their privacy. Only the most dedicated snoops can glean good information from a false trail.

But Facebook’s terms of use states that:

“Facebook users provide their real names and information, and we need your help to keep it that way. Here are some commitments you make to us relating to registering and maintaining the security of your account:

1. You will not provide any false personal information on Facebook…

2. You will not create more than one personal profile.

7. You will keep your contact information accurate and up-to-date.”

Google+ also states:

“To help fight spam and prevent fake profiles, use the name your friends, family or co-workers usually call you.”

Risks Of Using Fake Information In Social Networking Profiles

What happens to people who violate these terms of use and include fake info in their profiles? Failure to follow these terms of use simply means that the offending account could be shut down if discovered. Facebook doesn’t sue people for providing fake information and the cops won’t arrest people for using a drawing of a dog as their profile picture.

The likelihood that a social networking site will discover fake information is currently low. Many people use stage names, pen names, pseudonyms and nicknames every day. It is perfectly legal to use those alternate identities in many ways. Those names do not have to be the same as the one on a birth certificate and they can often be far more unique than what is found on a birth certificate. This makes it difficult for sites to tell what information is “real” or “fake,” as Google+ recently found out.

Don’t pretend you are someone else, don’t use another person’s real information and don’t commit fraud. That should be easy enough for you to avoid.

Are There Alternatives?

There are few alternatives to the information diarrhea on Facebook and Google+. Diaspora* is a potentially promising alternative but it is a long way from providing the value that Facebook does. Until Diaspora or some other alternative becomes viable, be careful the information you use to create your social networking profiles.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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Ooh baby, baby it’s a wired world. Cat Stevens could easily rewrite his lyric for a new era. Recently a couple of politicians have been caught on tape saying something that they thought was private when, in fact, their audio was being recorded. In both situations the recordings were not intended to gather personal information, but they recorded embarrassing stuff none the less. It is equally possible, and for a public figure probable, that there is someone intentionally recording a conversation either in person or on the phone. What is the law on the subject?

In-Person Recordings

The Supreme Court has determined, as a matter of federal law, that if you reveal something to another person, you risk that that person will tell the world what you have said. This is the justification that is given to allow an informant to wear a wire and even to record the conversation when speaking to a target in person Thus, unless there is a state law that limits the ability to record your conversation with another, your confidante may be secretly recording your conversation for some later use.

Telephone Recordings

By telephone recordings I do not mean wire taps by government officials, I am talking about the person you might be speaking to who is recording your conversation. Federal law requires that only one party to the telephone conversation consent to the recording. Thus, if you consent, you may record the phone conversation with another without any consent, or even knowledge that the phone conversation is being recorded. This approach has been adopted by most of the states as well. There are still a significant number of states that require that both parties to the phone conversation give some kind of consent before they may be recorded. There may even be criminal and civil liability for someone who does record a conversation contrary to state law. The rules and penalties vary, depending on the state, so make sure you know what rights you have in your own state.

Conclusion

Privacy is not about everyone becoming a hermit, unless you want that. It is about control over the disclosure of your private life and information in the ways outlined in the book How To Vanish. I do not recommend avoiding all in-person conversations or telephone conversations just because there is a risk of someone recording it. It is important to be aware of what the consequences of talking to someone in person or by phone might be and then order your affairs appropriately to control the level of risk that you are taking. It is also helpful to understand that when there are laws in place in a certain state against surreptitious recording by one party to a conversation, you may have recourse if there was a recording made without your consent. If you have any question about recording of phone calls, you will want to talk to a lawyer.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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I am not talking about collecting hunting decoys for needy hunters. I am talking about swapping out a sensitive laptop hard drive with a hard drive that has no sensitive information (a decoy drive) to protect your privacy from snoops.

Privacy Tactics

A great tool for protecting privacy is misdirection. Misdirection can make others believe you have nothing of value, reducing your risk of theft, invasion of privacy, etc. Misdirection can also include using decoys. Privacy predators that find a clever decoy, of no value to you, will be prevented from invading your real privacy and they won’t even know it.

Misdirection does not mean lying or committing fraud. Such tactics actually reduce your privacy because when a lie or fraud is discovered your affairs will be even more closely scrutinized, possibly by law enforcement.

Misdirection Helps People

To illustrate the difference between lawful misdirection and fraud, take the case of a celebrity who would like to go out in public without being recognized. A simple misdirection tactic that they might use would be to wear frumpy clothing, a hood and cheap sunglasses. This obscures many of their features so that, hopefully, they can pick up some toilet paper at the store without being hassled by hundreds of fans.

If that same celebrity were to use a fake ID to carry their disguise even farther, they would potentially be committing a crime.

As an example of effectively using a decoy, I turn to the wisdom of Mel Brooks. The folks in Blazing Saddles used a decoy town to protect their real town from the ravages of savages. If they were to use a decoy town in some settings, such as when selling the real estate, they might be committing a massive fraud.

Using A Decoy Drive With A Laptop

Us common folk can apply the principles of legal misdirection and decoys with the data on a laptop. Removing the hard drive of your laptop and replacing it with another hard disk is a great way to use misdirection to protect your data privacy.

There may be a million reasons why you would want to use a decoy drive to prevent access to your main laptop hard drive. You might be crossing a border where you and your data will be searched. You are not required to provide encryption keys, assuming you have encrypted your data, to enter the US, but other countries like Great Britain will require you to disclose those encryption keys. Only by removing a sensitive hard drive before traveling to Great Britain will your sensitive data be protected. Maybe you suspect a keylogger has been surreptitiously installed and you want to access an online account without tipping off the snoop. Or, you are just a fan of personal liberty and you want to try out a cool tactic.

Decoy Drive Steps

First, make sure you are fine with the consequences of swapping out your hard drive. Some warranties might be voided if you do it yourself.

Second, purchase an appropriate hard drive for your needs.

Third, follow the instructions in your user manual to remove the hard drive. Make sure to remove the battery so you don’t get zapped.

Finally, install the new hard drive and you are in full decoy mode.

Advanced Strategy

If some snoop were to discover your decoy drive, would they believe it was the only hard drive you have? If your decoy drive has no activity on it, a snoop might realize that they have not truly uncovered what they were looking for. Upon realizing you have used a decoy, they may be even more interested in finding out WHY, leading them to investigate you even more than they would have.

Just like deer hunters spray their decoys with scent, you need to do more than make your decoy drive look like it is the real thing. Please do not spray your computer with anything. To make it look like your decoy drive is your main drive, engage in some meaningless activity on your decoy drive regularly. Save some innocuous documents there, save some harmless family photos, do some meaningless web surfing or play solitaire once in a while. This will help you sell your decoy as genuine.

Conclusion

Swapping out your sensitive hard drive with a decoy drive at the right times can help protect a lot of your data privacy. Snoops will have to be very sophisticated to recognize what you have done if you are doing a good job selling your misdirection. To learn more about this and other ways to protect your privacy, check out the book How To Vanish.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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Cloud file storage is a great way to get a little bit more privacy. Separating your sensitive files from your physical location gives you flexibility and security. But are you exposing yourself to more risks by trusting your data with another company?

For privacy minded people, cloud security can be just as important as convenience. There are lots of cloud storage options, so which one offers the best cloud security?

There are three contenders that provide very good options for cloud storage which can also provide the cloud security and privacy needed. Dropbox, which we have discussed before, SpiderOak and Wuala. Check out how these three services stack up against each other to decide which, if any, you think is best for you.

Dropbox

Dropbox lets you store, sync, access and share selected data online.

Privacy/Security

Dropbox encrypts the content of your files, however, the file names are readable to Dropbox. Also, they maintain control over your password so there is a possibility that your password, and thus your data, could be compromised by rogue employees, warrantless searches, etc.

For this reason we have urged Dropbox users to encrypt their sensitive files with the open source encryption program Truecrypt before putting them in Dropbox. Open source software is the most trustworthy way to prevent surreptitious access to your data and get more cloud security.

Accessibility

Dropbox allows you to access your files, or save new files to your Dropbox folders, from any web accessible computer. You do not have to be using your own computer to access or save new files. This can be very handy for travelers working from internet cafes, people working from a different office computer, or if your own computer is lost or damaged.

Ease of Use

Dropbox is the simplest of these three options to setup and use. The lower default privacy and security settings make it easy to integrate with other services and easier to use in general. It is also extremely easy to customize the cloud security you want by encrypting your own sensitive files with Truecypt and leaving less sensitive files encrypted by Dropbox.

Price

Dropbox, along with SpiderOak and Wuala, offers 2 GB of free storage space. That can be enough storage for a few critical documents, like birth certificate, passport, etc. There are ways to increase storage, including paying about $10 per month for 50 GB or $20 per month for 100 GB.

SpiderOak

SpiderOak provides encrypted backup, storage, access and sharing of your files.

Privacy/Security

SpiderOak automatically encrypts all of the files backed up or shared through their service. The encryption is done on your own computer with the SpiderOak software that you download so SpiderOak’s central servers never have control over your password. That way, the SpiderOak employees or other snoops cannot read the files you have uploaded to your account, not even the file names.

SpiderOak software is not open source so there is no way to verify the claim that they do not have surreptitious access and cannot grant surreptitious access to others. It is still advisable to encrypt sensitive documents separately with Truecrypt before backing them up with SpiderOak.

Accessibility

SpiderOak allows you to access backed up files from anywhere, but you cannot upload new files to your SpiderOak account from a remote computer. This may be inconvenient for people who might be working from an internet cafe, etc. This loss in convenience is the price paid for increased cloud security.

Ease of Use

SpiderOak offers more features than Dropbox so it is a bit more complicated to use, although it is still fairly simple. Because of the limitations in accessibility it is harder to integrate with many other applications that you might have.

Price

In addition to the 2 GB of free storage, every 100GB of storage costs $10 per month. That is about half the price of Dropbox.

Wuala

Wuala is like somewhat of a hybrid between Dropbox and SpiderOak.

Privacy/Security

Wuala encrypts your data automatically before it is uploaded, similar to SpiderOak, although it is based on more open source projects than Dropbox or SpiderOak. It is not completely open source, so the same open source caveat generally applies. Wuala is, however, based in the EU where there are stronger data protection laws than there are in the US.

Accessibility

Wuala provides a way to access files via the web. This gives you access to your files from an internet cafe or other places, not just from your own computer. It still allows you to encrypt and decrypt your data locally, maintaining the high security while still providing the ease of use.

Ease of Use

Wuala is able to support drag and drop file management, much like Dropbox. This, and other features, make it less complex than SpiderOak, which does not have drag and drop features.

Price

The cost of Wuala is about the same as SpiderOak, which is about half the price of DropBox.

Conclusion

These are at least three good solutions for online backup, file sharing and storage which still offer cloud security. Each has different features and capabilities that will appeal to different people. If you want flexibility you can use Dropbox. If you want automatic strong encryption, you can use SpiderOak. If you want a bit more of a hybrid, try Wuala. You can combine any one of these with Truecrypt for maximum privacy and cloud security.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

Money is one of the biggest ways that we lose privacy. We must report our income and where it comes from for tax purposes. Our banking records are monitored and our identities vigorously identified. Employees and employers must reveal vast amounts of information to state and federal labor regulators and tax collectors.

Whenever information is disclosed, even if it is to bureaucrats, there is a huge risk of abuse, accidental disclosure and fraud. Plus, the employee-employer relationship has become a cash cow for governments. Employees and employers are low hanging fruit for taxes, fees and regulations because they are easy to monitor, record, control and collect from. Both employers and employees must share a piece of their economic pie with state and federal government officials, increasing the costs to businesses and lowering the benefit received by employees. Governments impose these costs and regulations to take care of employees and employers, whether they want to be taken care of or not.

There is a way for both workers and businesses to free themselves of many of these burdens, reduce costs, keep more money and protect their privacy. Becoming an independent contractor instead of being an employee, or hiring independent contractors instead of employees, does all of that and reduces the amount of regulation that must be complied with, reduces legal risks, and can reduce taxes for both. This means there are more resources to share between workers and firms.

Employees Suffer

Even though most of government regulation claims to protect employees, it has had the opposite effect. The marketplace changes much faster than government regulation. Government regulation is designed for a business world that existed 50 years ago. There is no way that regulation by a slow moving, democratic government that has to make weekend deals just to keep from being shut down can keep pace with a 21st century information age economy.

Healthcare has been designed around a system where employees work at the same company for most of their life. Today, the average worker will change jobs many times in their lifetime. Minimum wage and overtime pay was formulated when there was no competition from overseas labor. Even the way that companies account for and fund their benefits and pensions makes them extremely expensive for employees with diminishing value. One of the worst parts of all is that employees have little control over the taxes they pay.

Employees Have Little Control Over Their Own Life

There is no doubt that some of these protections benefited employees overall at one time. Some may even be helpful today. But an employee has no choice whether they want to participate in these systems, even if they could get the same benefits elsewhere for less. Employees have no control over their economic life.

Control over your own economic life is valuable, not only in terms of mental health and a feeling of self worth and independence, but also economically. Something as simple as being able to control more of the taxes you pay can have a dramatic impact on your financial well being.

How A Worker Can Pay $0 In Federal Income Taxes

The Wall Street Journal recently did a case study showing how an independent contractor can earn $150,000 in gross earnings in a year, take a few very common tax deductions, and have a federal income tax liability of $0.

Here’s how it breaks down:

• $150,000 income as a self employed independent contractor.
• $7,000 business start up expenses ($10,00 max first year, $5,000 in subsequent years)
• $10,000 legitimate business expenses
• $9,500 Medicare and Social Security tax (half of $19,000 paid)
• $43,100 401k contribution (you deduct both employee and employer portion)
• $10,000 IRA contribution ($5,00 for you, $5,000 for a spouse)
• $10,000 state and local taxes (estimated)
• $10,000 mortgage interest
• $10,000 health insurance premiums
• $6,150 Health Savings account
• $2,500 interest on student loan
• $4,000 kid’s college tuition
• $1,500 tax credits (buy hybrid vehicle, install solar panels, etc.)
• $200 Lifetime Earning Credits (community college class) = tax liability of $0 on $150,000 income.

Independent Contractors Pay Less Taxes Than Employees

This entire strategy is premised on a very important issue. To take advantage of these huge tax benefits you cannot be a regular employee. You can take advantage of every one of these tax benefits as an independent contractor. A regular employee would pay taxes on close to the full amount of that $150,000 of income.

Employers Pay Extremely High Labor Costs

Employees cost their employers a lot more than their hourly wage. Unemployment tax, ERISA, and Medicare costs alone are 15% of the total salary paid to employees. Employers also pay an average of $7,500 per employee in health insurance every year, something required when the firm has 50 or more employees.

High Administrative Costs And Risks For Employers

On top of these direct costs, there are numerous other regulations that must be complied with, even if it does not make economic sense. Employers are required to give family leave under certain circumstances, have detailed record keeping requirements, and many other things that raise the cost of having employees and decrease profitability, without actually paying workers more.

Employers are also exposed to lots of litigation risk. Whether it is an employee discrimination suit, failing to comply with regulation, harassment, overtime, even a conscientious employer can find themselves in an expensive, often frivolous, lawsuit. A lot of these costs and regulations are preventing businesses from hiring employees.

Independent Contractors Reduce Labor Costs And Increase Productivity

Businesses can still get the work done that they need to get done without incurring these huge costs by hiring independent contractors instead of employees. Independent contractors are also easier to train, more productive and provide a lot of flexibility in changing economic times.

IRS Scrutiny

These economic benefits have attracted a lot of workers and firms to try independent contractors instead of employees, but beware. The IRS and the Department of Labor have begun cracking down on those who do it wrong. Doing it wrong could mean having to pay back taxes and interest owed, or even paying penalties or overtime.

Follow The IRS 20 Factor Test

There is a way to do it right. The IRS has a 20-factor test that they use to determine if the worker is an employee or an independent contractor. This list is very fact specific and the weight given to every factor will depend on what other factors may reveal.

Independent Contractor Should Control Their Own Work

One of the most important things to consider is the amount of control that the firm has over the worker. An independent contractor will have control over their schedule and how they perform the work. The firm will control what they want the outcome or finished product to be. Suggestions are permitted but they must be suggestions. This is becoming much easier with the ability to work remotely over the internet.

Independent Contractor Can Do Work For Others At The Same Time

Another important factor is that the independent contractor is free to do work for others as well. This can be a critical factor that the IRS or Department of Labor look at. It is much better if the independent contractor is doing jobs for other clients, or at least advertising in places like Craigslist for other clients.

Independent Contracting Is A Win-Win

Independent contractors allow workers and firms to share more money between themselves. The government is entitled to much less of the money that flows from firms to independent contractors than employers and employees. Businesses become more profitable, individuals keep more money and everyone increases their privacy. Independent contractors can also have more control over their tax domicile, a more advanced but much more powerful tax saving strategy.

Conclusion

This is only scratching the surface of how to properly take advantage of this powerful strategy. Secrets of Independent Contractors, from HowToVanish.com is a simple and complete guide to help businesses and workers properly structure their relationship so they can take advantage of the huge tax savings.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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Your home address is one of the most sensitive pieces of information you have. You don’t want uninvited visitors bothering you and your family at home. Even though lots of businesses want to get a hold of your home address for marketing purposes, there are a lot of ways to prevent revealing your home address without paying that extra $1 for your Cheerios. Using a P.O. box or other ghost address will usually cut it when you need to share your home address without disclosing where you and your family actually hang out.

Recently a Canadian woman was cut off from her insurance benefits because her Facebook profile was used by her insurance company to gather evidence on her claim. Facebook can be a good networking tool and a good way to keep in touch with old friends, not to mention a great Halloween costume, but the proper precautions should always be taken to prevent unnecessary privacy disclosures.

Free speech is threatened when corrupt forces can pressure the means of distributing speech. Corrupt governments all over the world, or corrupt elements within governments, use the methods at their disposal to silence uncomfortable speech. One of the main methods they use is to threaten the source of speech.

Anonymous speech is important, even for more mundane reasons than scathing political criticism. Advocates of medical marijuana, proponents of evolution, gay rights activists, critics of local police, and many others may need the protection of anonymous speech to protect themselves while they voice their opinion. Efforts to censor online speech are doomed to fail because people will find ways to publish unflattering material online without leaving any trace of identity behind.

To publish a website, there are several points of weakness where identifying information could be gleaned. Political activists and whistleblowers will be able to easily circumvent identity requirements at each one of these points, allowing them to anonymously publish material online with an anonymous website.

Anonymous Website Domain Name

A website needs a domain name (one of those .com things) which must be bought and paid for through a domain registry like GoDaddy. Most domain registries allow people to protect their identity by using a domain registration proxy. Using these proxies is not sufficient to protect identity because identifying information must still be shared with the proxy, which can be pressured to reveal it.

To prevent the domain registry from revealing their identity to anyone, political activists will simply enter pseudanonymous information, like Publius or Silence Dogood. If they are really sneaky they may even enter the information of a competitor to register their domain or use an anonymous domain registrar.

Anonymous Website Payment

An important link in the chain is payment for services. Even if a pen name is provided, the person paying for the domain name could easily be tracked down by ruthless government officials by tracking down the source of payment, making an anonymous website less anonymous. To avoid leaving an audit trail back to their own financial accounts, political journalists may pay for their domain name with a money order paid for in cash, use a prepaid credit card (which they paid cash to acquire) or pay with Bitcoins. There are several companies that offer domain name registration for Bitcoins. If they send payment from a Bitcoin address that has not been published anywhere else, it will be hard to trace payments to them.

Anonymous Email

Domain registrars need to communicate with owners to provide information, remind them about renewals, and other things. Most of that communication is done by email. Whistleblowers will easily be able to set up an anonymous email address with any free email service.

Anonymous Website Hosting

Another critical part of maintaining a website is a server to host the website. Most websites are hosted by a web hosting company. As with domain registry, activists will use pseudonyms and anonymous email addresses to create their accounts to host their politically sensitive websites. And, they will pay with cash, prepaid credit cards or Bitcoins for the web hosting service.

Anonymous IP Address

As an extra layer of protection, anytime smart political dissidents connect to the domain registrar, set up or log into their email, connect to their web hosting company, or log into their website to post information, they will use anonymous web surfing techniques. Tor is free and easy, proxy servers are available all over the world. VPNs, especially those based offshore, will prevent authorities searching through service provider records from discovering the IP address of political activists. These methods are also a way to circumvent government blocked sites, a common practice in places like China.

Continuing Threats

Even if a clever political critic takes all of these measures, they are of course still subject to censorship from corrupt pressure on service providers to cut off service. The domain could be seized by government officials or the web host server could be confiscated.The activist themselves would still be protected, and they would be able to republish their information in other locations.

Even in the absence of legal action, a domain registrar, or a web hosting company can always be pressured to take information down. Offshore companies in jurisdictions that are unfriendly to the criticized government may be harder to pressure.

Conclusion

Free speech and the ability to dissent is threatened by censorship that results from threats of imprisonment, violence and assassination. Those threats are less effective to prevent people from publishing on the internet when people can easily publish information completely anonymously. For more techniques on protecting anonymity, check out the book How To Vanish and the upcoming report for political activists on Anonymous Internet Publishing.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

It isn’t hard to see why the Occupy Wall Street movement got started. Outrage over massive fraud committed by huge companies, combined with a government that protects them from prosecution, then takes money from innocent taxpayers and gives it to those same fraudster institutions is hard to contain.

The goals of the Occupy Wall Street movement are not clear at this early stage, and they may never be clearly defined. Certainly there will be some demands that are a step in the wrong direction, but there may be some demands that would be a positive change. So far, the movement is peaceful. No matter what they are protesting, peaceful protest is not always safe. The Occupy Wall Street protesters, Tea Party protesters, and any other peaceful protesters around the world, can use a few simple tactics to protect themselves and be more successful.

Peaceful Occupy Wall Street Protests Upsets Powerful People

Like all who oppose the ruling class, Occupy Wall Street protesters face serious danger to their finances, freedom, and even physical safety. Unjust imprisonment, unfounded criminal charges, potentially unwarranted fines and financial control are all possible tactics of a justice system loyal to financial crooks.

Occupy Wall Street Needs Strategy

While some protesters welcome the opportunity for political martyrdom, offering themselves up to be arrested, others would rather take a more strategic approach to promoting massive change. For those looking for an effective strategy, a very powerful tactic includes protecting the identity of protesters. Anonymity can be an effective tool to protect many protesters from unjust pressure.

Why Privacy Is Important To Protect Peaceful Occupy Wall Street Demonstrators

There are several elements that show why privacy is key to protect peaceful demonstrators.

Police Funded By Target Of Protest

First, JP Morgan, one of the main subjects of protester outrage, has donated millions of dollars to the NYPD. This donation will help provide better surveillance software for the NYPD to use, presumably on Occupy Wall Street demonstrators. It is no small stretch to think that police, as benefactors of such largesse, might be more inclined to protect their wealthy patron rather than the public. Thus, the Occupy Wall Street protesters may be subject to unjust actions by police.

Electronic Surveillance Is More Cost Effective Crowd Control

Second, the brute force being used to police the protesters is costing millions of dollars. With the expectation that the protests will grow in size, the financial cost to police will become enormous, even if funded by Wall Street bankers. Electronic surveillance is much more effective and efficient to protect the Wall Street bankers from the Occupy Wall Street protesters. The donation of JP Morgan and simple economics will push the police to use alternative tactics, such as electronic surveillance and control of cell phones, bank accounts, credit cards, and more, to control Occupy Wall Street.

Police Already Brutalizing Protesters

Third, the police have already begun using unjust tactics to injure or arrest innocent people. After corralling a small peaceful assembly of people on a public sidewalk, officers used pepper spray on them without any justification. In another incident, police guided protesters from a pedestrian area (where protesters could legally be) to lanes of vehicle traffic (where protesters supposedly could not legally be) and arrested them en masse.

Types Of Electronic Surveillance

What kind of electronic surveillance might law enforcement conduct?

Cell Phone Surveillance

Law enforcement can get many cell phone records without a warrant. They can either ask the phone company for the records, claiming it is part of a criminal investigation, or they can hijack cell phone service and collect the information themselves. This could reveal the identities of many of the people who have cell phones at the Occupy Wall Street demonstrations. Those individuals could then be singled out for other types of selective enforcement of laws.

Facial Recognition

Police might use visual surveillance and facial recognition to identify individuals in the crowd. Police could then prompt protesters to J-walk, litter, smoke a cigarette within 20 feet of a doorway, or commit some other action that is captured by surveillance cameras and citations issued by mail. Citations are annoying enough, but failure to pay them could lead to more serious jail time, bigger fines, and other financial problems.

This kind of crowd surveillance has been used before. In Colorado in 2006, protesters gathered in the hundreds to voice their support for relaxed marijuana rules. Cameras scanned the crowd, later police offered $50 to identify individuals in the photos, and issued citations for trespassing, among other things. 5 years later, facial recognition technology may make it much easier for police to identify numerous Occupy Wall Street demonstrators.

Financial Blockade

Protesters that are identified by visual or electronic surveillance could be made known to the various financial institutions that people depend on. Protesters could see their Visa, Master Card, bank accounts or Paypal accounts frozen, payments refused, or services denied. Those organizations accepting donations for the Occupy Wall Street movement could also see a similar financial blockade.

These kinds of financial blockades have been used before. Visa and Mastercard stopped processing donations to Wikileaks and Paypal froze their account, causing serious financial trouble for the activist website. Paypal is notorious for freezing accounts for arbitrary reasons.

To Prevent The Crippling Effects Of Surveillance, Protect Privacy

To prevent potentially crippling pressure, protesters in any movement can follow a few simple tactics.

Stop Cell Phone Surveillance

To stop cell phone surveillance, buy a pre paid cell phone with cash and use that to communicate while at the protests. Otherwise, remove the battery of your cell phone or leave it at home. There will be no way for law enforcement to surreptitiously collect the data from your phone if you do.

Prevent Facial Recognition Software

To stop visual surveillance, wear a hoodie, hat and sunglasses to the protest. In places where masks and face paint are not illegal, they can also be used to prevent facial recognition. This may not apply in New York where there are laws making wearing a mask or face paint illegal.

Use Cash, Gold, Silver and Bitcoin

To prevent financial blockades, people can use cash, gold and silver to trade in person. Be careful using gold and silver as a medium of exchange. The capital gains tax on gold and silver is very high (28%) so using it may actually cause you to owe taxes that will go to bailing out the very banks that are being protested. For anonymous online transfers, Bitcoin may be a viable option. It not only protects the identity of users, but Wikileaks uses it to accept donations in spite of the financial blockade of the formal banking system.

Conclusion

Protecting privacy protects peaceful protesters of any cause. Smart strategy is needed to prevent financial blockades, unjust police action and other tools that could be used to cripple protest movements. Using these privacy tactics and others in the book How To Vanish can help peaceful people avoid unjust actions from law enforcement around the country and around the world.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

Secret Weapon To Protect Medical Privacy

Medical information is among the most private personal information. New healthcare laws in the US essentially require doctors to make all of their records electronic and store them in government databases. This poses a serious threat to patient privacy rights. There is one way to find private hospitals where your information will not be entered into US databases and you may even get better health care for much less.

Risk to Patient Privacy Rights

Having detailed medical information housed in one massive database makes it one of the most lucrative targets for hackers. It will not only contain health information (potentially worth its weight in digital gold to the highly ethical pharmaceutical industry), but it will also include demographic information, like race, ethnicity, primary language, and gender. This information is golden to marketers. And that says nothing of its value to identity thieves.

Government databases are well known as extremely poorly protected. They aren’t even capable of protecting classified and top secret material. I hate to think how well they will protect our medical data. It may only be a matter of time before our medical histories are public information.

There Is Bound To Be Abuse

The law permits use of the data for clinical research, even if the subject objects to the use of their data. North Carolina sheriffs have already asked to browse prescription records to look for potential pain medication abusers. With even more data available, who knows what kinds of crimes they think your medical records might be evidence of.

About 12 million people will have to have access to such a health system, from heart surgeons to grocery store pharmacists. It is inevitable that one of those 12 million will be able to accidentally or purposefully leak massive amounts of data.

And, if the US social services system becomes anything like the UK system, the government will be able to take away people’s kids for being overweight or for a learning disability. Having all medical records searchable means that many more innocent people with unfortunate genes could be the target of overzealous social workers.

Protect Patient Privacy Rights

To prevent medical procedures or conditions from showing up in US medical record databases, use offshore medical facilities. Seeking treatment in private hospitals in other countries is often called medical tourism and can be far more beneficial than just protecting privacy. Many hospitals in places like New Zealand, Thailand, India, Mexico and Costa Rica, cater to wealthy foreigners. In many cases the doctors are trained in the US. They offer as good, or better, health care than any US facilities and they are usually 50% to 90% cheaper, including all travel expenses like airfare and hotel.

Risks

Before seeking medical care abroad, be sure to do extensive research. Although some private hospitals may cater to wealthy travelers, not all hospitals in those countries will be the same. Some will offer substandard care in unhealthy facilities.

Most other countries will not protect patients from medical malpractice, like they do in the US, and pharmaceutical companies may not be liable for injuries from medications like they are in the US. Also, medical information in foreign countries may not be protected as private.

Protect Yourself From Risks

There are several companies that help arrange offshore medical visits to make sure you select the best facilities and doctors. There are also voluntary organizations that certify medical facilities such as the JCI to promote quality care. A considerable amount of research should be done before seeking medical treatment away from home.

Conclusion

Seeking medical treatment abroad can help protect patient privacy rights. Information about those visits will not be automatically entered into the US electronic health record database. Additionally, seeking care offshore can be far less expensive, it can be as good, or better than US care, and you may even have access to many treatments, drugs and procedures that are not permitted in the US. Don’t forget to check out the book How To Vanish for more ways to protect your privacy.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

We Are All Going To Die!…Someday

When we die the court system will take control of our financial lives and make one of the most private aspects of our lives public. This loss of financial privacy will happen unless we take one simple step to protect ourselves, our assets and our families with a living trust.

Probate is the Problem With Financial Privacy

When people die they leave behind some stuff (hopefully). Most people have a will, if they have anything at all, to determine who gets all of their neat stuff. To administer this process, for people who do or do not have a will, the courts take control of all the assets, make sure all the money goes to the right people, and make your will a part of the public record. This is called probate. Anyone particularly interested in learning what your kids got will be able to find out very easily. Some courts even make the information available online. This is a huge blow to financial privacy.

Living Trust

The only way to avoid having so much of your private financial life displayed for the public is to prepare a living trust. A living trust allows you to maintain control over your assets while you are alive, avoids the public probate process to distribute assets when you die and maintains your financial privacy.

There are some other great benefits as well. Compared to the cost of administering a living trust, probate is expensive. The cost is based on the value of the assets that the probate court deals with, so the more money you have, the more it will cost you. Probate is also slower.

Don’t Get Hit By A Bus

What happens in the unfortunate event that you are hit by a bus and turned into a vegetable? Whether or not you have a will, your assets are going to sit around and can’t be touched. They can’t be used to pay your medical expenses, they can’t be used to pay your mortgage, they can’t be used to pay for the groceries of your stalwart spouse. This can pose a very bad problem when assets exist to pay those costs, but you are incapacitated, covered in bandages and unable to get at those assets.

With a living trust, the unfortunate bus incident will not leave your assets untouchable until you die. The trustee can use the assets to pay for expenses while you are still alive but unable to manage your own affairs. This makes sure that the family members who are diligently at your hospital bed side can pay for the things they need, hopefully balloons and get well cards.

Living Trusts Are Common

The cost of having a basic living trust prepared is relative to its complexity. If your financial situation is simple, they can be quite inexpensive. If your financial situation is more complex, it will be worth the cost and effort to draft an adequate living trust. Many attorneys are able to prepare them and make sure they are properly funded.

Conclusion

The legal system still contains several tools that help ordinary individuals protect their financial privacy. Having a living will is one of the great ways to take advantage of that system. Living wills provide a private alternative, to public indignity. Check out the book How To Vanish for more legal tools to help protect your privacy.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

For the past few months, police departments have been using a new iris scanning device to identify people they encounter. Many more police departments will begin using this device soon. The scanner can be held up to the eye of any person and almost instantly identify them more accurately than a fingerprint. Police have imposed restrictions on themselves to prevent misuse of iris scanners. Like a chubby kid guarding a Happy Meal, indulgence is more likely than restraint.

Currently, iris scanners are limited to checking the person scanned against a national database of iris scans. This database presumably only contains criminals, children and individuals who may need assistance, like alzheimers patients. The devices are not supposed to be able to capture and store new entries. These self-imposed limitations may only be temporary.

Warrantless Iris Scans Are Probably Unconstitutional

Although not yet tested, there are some potentially strong constitutional challenges to many iris scans that are likely to occur. If you have a reasonable expectation of privacy in some information or item, the police need a warrant to conduct a search. (Katz v. United States) There is no reasonable expectation of privacy for things that are in the plain view of the public. (Texas v. Brown) Technologies that enhance the senses to be able to see what is in plain view, like common binoculars, can be used by police without a warrant. (Dow Chemical v. United States) Something that is not visible to the naked eye is not in plain view. (California v. Ciraolo; Kyllo v. United States; People v. Arno) Police may also conduct a search that would otherwise require a warrant if they get consent. (Schneckloth v. Bustamonte).

An image of your iris and the detail of your iris is apparently very important information. Many people might reasonably expect to have a right to privacy in that intimate part of their body. Although the iris is held out to the public, the very intimate details, so much detail that the iris becomes a unique identifier, is not held out to the public because nobody can see that with the naked eye. A very powerful technology that can see more than the naked eye, even upon very close inspection, is required. Thus, such a search will likely be unconstitutional without a warrant.

Do Not Consent To An Iris Scan

If you agree to have your iris scanned for identification purposes, you give up any chance you had of fighting the constitutionality of a warrantless iris scan. Simply stating that you do not consent to having an iris scan taken should be sufficient.

Don’t Let Them Scan Your Face Either

These same devices are also capable of scanning faces for identification purposes. Preventing these scans is a bit more complicated because your face, and the ability to recognize you from your face, is most definitely held out to the public in plain view. To prevent face scanning requires knowing at what point in a police encounter the face scan is taking place. Knowing this will help you to know if you must submit or if you are free to leave.

Ignore The Police: “Free To Leave” Encounters

Police may stop people on the street in what is known as a “consensual” encounter for no reason at all. Police could potentially ask you for a face (or iris) scan during this “consensual” encounter. If you reasonably think you are free to leave you can ignore everything the police are saying and just walk away. (Florida v. Royer; Michigan v. Chesternut). If you aren’t sure, or you just want to be polite, one of the best things you can say is “am I free to leave or am I being detained?” Stopping the encounter as soon as possible before a scan of your face can be required is the best way to prevent a facial scan. If you aren’t free to go, you are being detained.

Detention

To detain you, the police need reasonable suspicion based on articulable facts that you are, have been, or will be committing a crime. (Terry v. Ohio) If a reasonable person thinks that they aren’t free to go, they are being detained. (United States v. Mendenhall). Here is where it gets a bit tricky. Some states permit you to remain silent to questions at this point, but many require you to at least provide your name. (Hiibel v. 6th Judicial District Court of Nevada) If you are in a no name state, you may be able to refuse a facial scan. This will probably make the police pretty mad so it might not be recommended. In states where your name is required, there is probably nothing you can do.

Arrest

If the police then have probable cause to believe you committed a crime, they may arrest you. They will take you into the mug shot room where a long line of celebrities have taken their most memorable photos. At this point, there is nothing you can do to keep the police from putting your face in their facial recognition database.

Conclusion

Warrantless, unconsensual iris scans are probably unconstitutional. Face scans aren’t as inherently unconstitutional, but can still be prevented. If you are a law abiding citizen, these, and other tips from HowToVanish, can help you protect more of your privacy from one of the worst invasions of privacy that exist, police encounters.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

Your home address is one of the most sensitive pieces of information you have. You don’t want uninvited visitors bothering you and your family at home. Even though lots of businesses want to get a hold of your home address for marketing purposes, there are a lot of ways to prevent revealing your home address without paying that extra $1 for your Cheerios. Using a P.O. box or other ghost address will usually cut it when you need to share your home address without disclosing where you and your family actually hang out.

One of the only times that you can’t use a ghost address is with a drivers license. A drivers license is an absolute necessity for most people and you can’t get one unless you reveal the place where you and your family lay your heads at night. Usually. There is one way to drive legally in the US without having to give away your most sensitive information. Use a foreign drivers license.

Revealing Home Address Is Not Safe

“But,” you say, “not just anyone can go look up DMV records.” “What is the harm,” you proclaim, “from sharing your home address with the government?”

Remember the geniuses you had to deal with the last time you were at the DMV? They are the ones protecting the vast amounts of information in their databases. A little bit of social engineering and, voila: data is easily compromised.

Plus, the bigger the stash of data, the bigger the target for identity thieves and hackers. DMV databases are ripe targets because they house so much important data. Yet the public is essentially forced to store their data in DMV databases and take that risk.

Foreign Drivers Licenses Are Legal

You can drive in any state with a valid drivers license from any other state. You can also drive with a valid drivers license from any other country. (Check Out California Vehicle Code Section 12502 (a)(1)). International drivers license certificates are not required and are really only suggested if your drivers license is from an obscure country. The other great thing about foreign drivers licenses is that you don’t have to reveal any information to the US government to get it. You might be able to find another country that requires less information, or stores less of it in vast electronic databases.

Get A Foreign Drivers License

Every country will have its own laws, but generally if you have permanent residence you can get a drivers license.

Avoid Having To Get A Local Drivers License

Here is where using a foreign drivers license can be tricky, but it is still doable. Most states make you get a license after residing there for just a few days or weeks. This doesn’t apply if you are NOT a resident of the state. If you are a temporary visitor to a state and have your permanent residence somewhere else (like another country) you will not have to get a local license, thereby allowing you to drive without complying with dangerous rules. (Check out California Vehicle Code Section 12505(c)).

People with multiple residences in multiple states have dealt with this issue often. Even though they may spend a few months out of the year at their winter home in Phoenix, a few weeks at their cabin in Montana, and the rest of the year at their permanent home in Lake Tahoe, NV, they do not need to get more than one drivers license. They get it in the place that is their permanent home. It is actually illegal to have more than one drivers license at a time. Using a foreign license is a similar concept on an international scale.

Show Permanent Residency Where You Want It

You are generally considered a resident of the place where you call home, the place where you intend to return. To demonstrate this very subjective standard, you can look at other factors to provide evidence of your permanent residence. Things like your voting registration, where your permanent home is, and several other factors could demonstrate adequate residency. (Check out California Vehicle Code Section 12505(a)).

Avoid Residency

Employees are almost always a resident of the place where they have a job. Either make sure you can work remotely, commute to the place where you work, or avoid being a regular employee. Also, avoid paying in-state tuition if you are a student, or if your kids are students.

There are dozens of other facts that could be used to show where your permanent residence is. The more factors that fall in the place where you wish to be a permanent resident, the better. The State Income Tax Optimization Guide has a comprehensive strategy for controlling where those factors appear and where they do not.

Time Is Not Critical

Many people think that the amount of time you spend somewhere is critical. I often hear the phrase 6 months and 1 day. This may be true in some places, but for the most part it is just a guideline and is not determinative. It can be helpful (or hurtful) but it isn’t everything. Just because you happen to spend more than 6 months in a particular place does not mean that you are a permanent resident there. If other factors line up heavily in favor of some other location as your permanent residence, the other factors will probably control.

Conclusion

Most of these rules are based on the rules of California. Most other places are not as strict. So if you have a valid foreign drivers license and avoid having to get a drivers license in the state where you happen to be driving, you can protect a very important piece of information… where your family actually lives. So go ahead and protect your family from the useless and dangerous requirement of disclosing your home address in order to drive by getting a foreign drivers license. For more tips on how to protect your important personal information sign up for the email list. For a comprehensive strategy to protect your privacy, check out How To Vanish the book.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds

The Liberty Dollar case has had a huge impact on the world of gold and silver trading, investing, ownership and use. I covered a lot of ground in Part I and Part II, but there is another important aspect of that case that leaves the legal landscape partly shrouded in ominous and threatening clouds. What is the risk of criminal prosecution or criminal conviction to those who make or use gold and silver rounds of u201Coriginal designu201D?

Is There A Risk Of Prosecution For Trading With Gold And Silver

To answer that, we have to fully understand the actual law that was broken. We also need to consider the existing law that was not at issue in the Liberty Dollar case, the threats of prosecutors and the effect of potential constitutional challenges to those laws if a prosecution were undertaken.

Mr. von NotHaus Violated Fraud Based Statutes

The Liberty Dollar Trial was about fraud, not a private currency system as prosecutor Anne Tomkins falsely implied. The jury was asked to decide if the elements of fraud and conspiracy to commit fraud were met, nothing else. No other legal basis for the prosecution was ever presented to the jury and implying that there was another legal basis is mis-stating the facts of the case.

Critical Facts of The Case

Liberty Dollar made, sold, and used rounds that had many similarities to official US government coinage. The rounds were minted with a face value but the FRN value of the silver in the coins was less than this face value. Liberty Dollar encouraged exchanging Liberty Dollars with people who were unaware that the underlying FRN value of the silver was less than the denomination minted on its face. Liberty Dollar profited from this difference in value.

Key Elements Of Fraud

To be guilty of fraud, a jury must decide that a person has met all of the elements of that crime. The Jury Verdict Form contains all of the elements that this particular jury decided. The critical parts are summarized here.

Count 1 — Conspiracy

I will not get into Conspiracy because it is not in controversy.

Count 2 — Counterfeit Coin (18 USC 485 and 2)

The core actions that Liberty Dollar must have taken to be guilty of this crime are:

1. To make coins;
2. That resemble official US government issued coins;
3. And use those coins;
4. With intent to defraud.

It is undisputed that Liberty Dollar made and used coins. Their resemblance to official US government issued coins was a question of fact for the jury to decide. As described in detail previously, there were plenty of facts that could lead a reasonable person to believe that Liberty Dollar rounds resembled official US coins.

The final necessary element was the intent to defraud. I personally don’t think Mr. Von NotHaus had the intent to defraud, but intent can only be inferred by surrounding facts and circumstances. Clearly there were several facts that could lead a reasonable person to believe that there was intent to defraud. For example, encouragement to make change with people who did not know that there was a difference between the FRN value of the silver in the round and the face value.

Notice that nothing in this count requires that the coins be of original design.

Count 3 — Current Money (18 USC 486)

The core elements here are:

1. Make and use a silver coin;
2. Intended to be used as current money;
3. Resembling genuine coins of the US OR coins of original design

Again it is undisputed that element 1 was met. Their resemblance to US coins has already been established. The intent can only be supposed from surrounding facts. The fact that Liberty Dollar encouraged merchants to make change with unsuspecting people could be the reasonable basis to find intent to use Liberty Dollars as current money.

It’s important to note the u201CORu201D in Count 3. This means that the statute is violated whether you violate one, the other, or both of these prongs. As I have laid out previously, the u201Cresembling genuine coins of the USu201D prong could easily stand on its own as having been violated. The u201Coriginal designu201D prong is unnecessary for the conviction.

The u201Cresembling genuine coinsu201D prong is essentially a case of fraud. The Liberty Dollar rounds were presented as something that they were not, to the detriment of unsuspecting individuals. It appears the jury thought the case was about fraud as well. At least one person claiming to be a juror in the case left a comment in the original post stating that my previous analysis correctly reflected u201Cwhat went on in court in the Liberty Dollar Trial.u201D

Who Was The Victim?

Many have claimed that there were no victims because the underlying value of the silver would eventually (and in hindsight has) become more valuable than the FRN that people gave up to get Liberty Dollars. Even people who mistakenly accepted Liberty Dollars, they claim, would have actually benefited.

This argument defies reason. The FRN price of silver changes. Sometimes it goes up and sometimes it goes down. Although I bet money that it will go up over time, it is impossible to predict the future. Nobody knows for sure if or when the price will change, how much it will change, and in which direction.

What must be understood is that to get someone to unknowingly accept Liberty Dollars instead of FRN is to unknowingly accept the risk that silver would appreciate in value instead of the risk that the FRN will decline in value. This is a risk unwitting acceptors of Liberty Dollars did not agree to bear.

Risk Has Value

Another problem is that the person who takes the discounted Liberty Dollar could have taken their $10 FRN and bought more silver somewhere else had they been paid in FRN instead of the Liberty Dollar round. Thus if the price of silver rises, they would have been prevented from realizing gains on a larger amount of silver. Thus people who unknowingly accepted Liberty Dollars instead of FRNs unknowingly suffered real or potential losses.

Tips To Avoid Prosecution For Fraud

So now that it is clear that the elements of fraud were met, what can honest traders do to avoid innocently coming too close to the line of fraud, which I think Mr. Von NotHaus did. Everyone should talk to a lawyer directly for legal advice, but a general principle is to avoid anything that would give the impression of fraud to investigators and clearly include things that would help eliminate the impression of fraud. Avoid making, using or trading rounds, medallions or tokens that in any way resemble official government currency of any country.

Avoid:

• Using the $ symbol
• Putting the name of a country on it like u201CUSAu201D
• Putting any word on it that appears on official currency like u201CLibertyu201D
• Using denominations that match the same denominations used in the official government coin
• Putting images on them that are similar to images used on official government currency
• Offering them as change in FRN transactions

Some things that can be helpful are:

• Use fictional characters, like Disney Dollars or Ithaca Hours do
• Display the weight and fineness of the metal rather than a numbered value like $10
• Be extremely clear when using them that they are not official US coins

Likelihood Of Prosecution

There are a handful of private mints, thousands of coin dealers and millions of people that make, use and trade rounds, medallions and tokens. If they follow many of these guidelines they are probably not at risk of prosecution for fraud.

Prosecution For Fraud Is Legitimate

Libertarian principles allow the use of force to protect against fraud. Dr. Viera concedes, in Pieces of Eight (pg. 1533) that Congress may have the Constitutional authority to legislate the u201Cresembling genuine coinu201D prong. Since it is clearly shown that people were, or there was an imminent threat of being, defrauded, prosecution under this part of the statute is likely to withstand any philosophical or constitutional challenges.

Prosecution For u201COriginal Designu201D

Anne Tompkins inferred that she intended to prosecute people under the u201Coriginal designu201D prong. She was obviously relying on dicta from a few lower court cases as the broad basis of her threat.

Dicta is not the law. Dicta is a statement in a court ruling that is usually made by a judge in passing with little to no research or analysis. At best she can hope that dicta maybe, possibly, someday becomes the law. Thus she is threatening to fly us head on into the brooding storm clouds of untested areas of law.

What This Threat Of Prosecution Means To Honest People

There are real implications to this kind of threat. First of all is the cost of legal defense. Even a person who is ultimately found innocent will probably incur legal costs in the tens of thousands of dollars. If there are constitutional challenges, which might require multiple appeals, the cost could easily rise to the hundreds of thousands.

Overzealous Prosecutors Regularly Disregard The Intent Behind A Law (To Punish Real Criminals) And Target Anyone Who Accidentally Crosses The Line

While most people find prosecution of people with innocent intent deplorable, overzealous prosecutors have been known to disregard the reason for a law and use their discretion to prosecute anyone who violates the letter of the law, even if the defendant’s intent and actions are otherwise completely innocent.

A good example of that is the prosecution of an Ohio woman under anti-drug laws for buying 2 packages of cold medicine in 1 week, one for two separate members of her family who were ill. The uphill evidentiary battle that defendants face makes it easy for prosecutors to convince juries that a defendant should be convicted in these kinds of cases.

If That Were The Law It Would Be Completely Unworkable

If this dicta were adopted as law, cautious people would have to avoid making or using anything that could potentially be used to barter because such an item could conceivably be used to compete with official government issued currency. That could include millions of rounds, commemorative medallions, or tokens. That is obviously a ridiculous outcome.

There are a few cases where clearly marked tokens such as Chuck E. Cheese tokens or batting cage tokens are outside of the purview of the u201Coriginal designu201D prong. Hence prosecution of those special purpose tokens is very unlikely.

A case centered around the u201Coriginal designu201D prong would not be about fraud at all. It would be about the right of people to use whatever medium of exchange they choose. Preventing private parties from trading what they want in such a manner is complete tyranny. In Argentina and other places around the world, the people purchase vehicles as a hedge against inflation. Under Anne Tomkins’ erroneous definition of the law, vehicles would be illegal because they compete with the national currency. Another ridiculous outcome.

18 USC 486 Is Probably Unconstitutional

The arguments supporting the unconstitutionality of the u201Coriginal designu201D language are quite strong.

Art. I Section 8, clause 5 of the US Constitution states in part:

u201CThe Congress shall have Power To… coin Money, regulate the Value thereof, and of foreign Coin.u201D On its face this gives the Congress the power to regulate the value of its own coinage, and that of foreign coins. There is absolutely no mention of the ability of Congress to do anything regarding private coinage.u201D

Clause 6 continues stating:

[Congress shall have power to...] u201Cprovide for the Punishment of counterfeiting the… current Coin of the United States.u201D This clearly gives Congress the power to punish counterfeiting the coins that they themselves produce, and probably to punish coins resembling genuine US coins. Again, there is absolutely no mention of private coinage. In fact, the definition of private coinage is that it is not the current coin of the US. Therefore Congress has no authority over private coinage at all and neither does any other branch.

The Ninth Amendment to the US Constitution states

u201CThe enumeration in the Constitution of certain rights shall not be construed to deny or disparage others retained by the people.u201D

The Tenth Amendment:

u201CThe powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.u201D

Since no Congressional power over private coinage is delegated, or even implied, nor is that power reserved to another branch of government, private coinage must be a power and right reserved to the states or the people under the 9th and/or 10th Amendments.

There are many, many, many, many, many, many examples of private coinage used throughout the US, under these same Constitutional provisions, for centuries. See What Has Government Done To Our Money by Murray Rothbard for a full discussion and historical examples.

What Is So Unconstitutional About 18 USC 486?

18 USC 486 states:

Whoever, except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design, shall be fined under this title or imprisoned not more than five years, or both. (emphasis added)

The constitutionality of the u201Coriginal designu201D clause is clearly eviscerated by Dr. Viera in Pieces of Eight pg. 1533 (criticizing 18 USC 486):

u201CThis prohibition [on private coinage] is plainly not grounded in Congress’s power u201CTo provide for the punishment of counterfeiting the current coin of the Unites Statesu201D because a person… who makes… coins… of original design is not doing anything with relation to the u201Ccurrent coin of the United Statesu201D by definition.u201D

The power to regulate coins of original design is clearly not within Article I Section 8 clauses 5 or 6. It is thus a clear violation of the Ninth and Tenth Amendments to the US Constitution.

Dicta that claim legitimacy of this language shows that judges have clearly failed to consult legislative history, constitutional authority, American history, or case law dealing with it. Thorough research and analysis would likely reveal the error in these statements of unauthoritative opinion.

The Outcome Of A Constitutional Challenge Is Unknown

Unfortunately, the current state of monetary law in the United States is nonsensical so it’s tough to know how persuasive these constitutional arguments would be to an uneducated judiciary. Thus a constitutional challenge is not guaranteed to have the logical outcome of invalidating the offensive language of the statute.

Someone Else Must Be Convicted Before A Constitutional Challenge Can Be Made

Without getting into some very intricate rules on u201Credressability,u201D it is doubtful that anyone could even challenge the clearly unconstitutional parts of 18 USC 486 until someone is convicted under the relevant part of that section. That is because a person can’t appeal a decision unless the outcome would change if they win the appeal. (Allen v. Wright, 468 U.S. 737 (1984)).

Here, Mr. von NotHaus was convicted. His conviction would stand under the fraud prong of the statute alone and does not need the u201Coriginal designu201D prong. Even if the u201Coriginal designu201D language was declared unconstitutional on appeal, it wouldn’t change the outcome for him. Therefore he is unlikely to be able to challenge its constitutionality.

Another Legal Guinea Pig Is Needed

To challenge the constitutionality of the u201Coriginal designu201D prong, another individual will have to be convicted. This time, their conviction must clearly be under the u201Coriginal designu201D prong and not at all under the resemblance prong. This means that the constitutionality of this law will probably remain unresolved for many years.

Practicality of Enforcement

When innocent people might be wrongly prosecuted because it looks like they are committing a crime when in fact they aren’t, they must determine how likely it would be for them to be prosecuted for their innocent behavior. Part of this calculation is determining how likely it is that they would be prosecuted based on the practicality of enforcing the law that could mistakenly be used against them.

Private Mints

A mint, the company actually making rounds, medallions and tokens, is at the most risk of prosecution. Their operation is probably fairly large, easy to find and hard to move.

Fortunately that risk is still very low, even after the von NotHaus conviction. The Sunshine Mint that produced the Liberty Dollars was not a defendant in the case and there have been no prosecutions of the many other private mints throughout the country. Thus prosecution of private minters under the original design prong is unlikely.

Individuals

It would be very difficult and expensive to prosecute individuals for using rounds medallions and tokens in private transactions. It would be incredibly difficult to detect and investigate. Unless people feel they have been defrauded upon accepting them, there is unlikely to be any investigation of individuals for using metal to pay for goods and services.

This is important for the millions of innocent people who will be trading things that are not illegal because they should know the risk of erroneous prosecution. It is extremely low because of these difficulties in detection and investigation of the transactions.

Risk Of Prosecution For Fraud

There are millions of rounds, medallions or tokens existing in the US that follow the guidelines mentioned earlier. To prosecute every maker, holder or user of them would be completely outrageous. It would also be practically impossible to prosecute everyone because it is impossible to monitor that many private transactions effectively, even with dictatorial control. Therefore, someone making or bartering with gold or silver who is following these guidelines has very little risk of mistaken prosecution for fraud.

Conclusion

Barter with metal has not been ruled by a court of law to be illegal. Barter is constitutional, whether it is for chickens, potatoes, FRN, gold or silver rounds or anything else you want. There is a cloud over the issue of bartering with gold or silver rounds, medallions or tokens because of the generalized and remote possibility of being prosecuted if you do. Bartering with metal is so common and widespread it would insanely expensive to systematically investigate and impractical to enforce such a policy. Thus, the threat is not nearly as great as the threat posed to Liberty Dollar. Plus, the u201Coriginal designu201D language that smacks of dictatorial control is likely to be overturned because it is probably unconstitutional. For more ways to protect your right to private exchange of goods and prevent being mistakenly prosecuted, get the book How To Vanish and sign up for the email list.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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Pretexting has nothing to do with your preparations before sending a text message to a friend, although sometimes I wish people would do that. Pretexting is the practice of pretending to be someone else in order to get private personal information about you. The most famous case of pretexting occurred a few years ago when the Hewlett-Packard Chairman hired a firm to investigate HP’s own directors. The firm used pretexting techniques to do the investigation. Essentially they pretended to be the directors to get access to their phone records. The HP scandal that ensued cost some people their reputation. Your reputation is probably not at risk but your bank account may be.

Who Pretexts and How Is Pretexting Done

A child may ask their parents the date of their anniversary because they think it might be the code to unlock the laptop computer. An identity thief might call your bank pretending to have lost their checkbook and so need the bank account information. Both of these are examples of pretexting. Popular tactics include calling you pretending to be taking a survey or pretending to be your bank or a government institution and then asking for detailed personal information. They then either sell this information or use this information and call your bank or other company pretending to be you because they now have all the public information on you and the private answers you just supplied to them as tools to get past any identification requirements.

How to Avoid Pretexting

Pretexting is illegal, just like home robbery. Even though both are illegal, we cannot rely only on the law alone to protect us from these evils. To protect from robbery we have locks on our doors. Even people who don’t use locks on their door at night still have them in case there is a threat of robbery. So we must put the lock on our information door and know when and how to use it. There are two things that, if done together, will be the most effective methods to avoid pretexting.

First, do not use passwords or password backup questions that are public or well known information, like your mother’s maiden name. You might want to use something like the name of your first pet or the first name of your best friend in fourth grade.

Second, never give out private information over the phone or internet unless you initiated the contact. Be very suspicious of anyone asking for information if you do not know them personally, and even then, make sure it is them you are talking to. Other measures include being mindful of your account statements and billing cycles as well as getting a regular updated credit report and looking for irregularities. Get a good paper shredder and shred all documents that contain personal information before you throw them away.

Third, share the importance of privacy and protecting personal information with friends, family or your hawaladar. The more privacy the people surrounding you have, the more privacy you will have. You can email them this and other articles or simply talk to them about good privacy habits.

Conclusion

Pretexting is a threat to anyone in any position, just ask the directors of HP. Take appropriate measures to avoid being an easy target for pretexting which can be found in the book How To Vanish.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

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Money is one of the biggest ways that we lose privacy. We must report our income and where it comes from for tax purposes. Our banking records are monitored and our identities vigorously identified. Employees and employers must reveal vast amounts of information to state and federal labor regulators and tax collectors.

Whenever information is disclosed, even if it is to bureaucrats, there is a huge risk of abuse, accidental disclosure and fraud. Plus, the employee-employer relationship has become a cash cow for governments. Employees and employers are low hanging fruit for taxes, fees and regulations because they are easy to monitor, record, control and collect from. Both employers and employees must share a piece of their economic pie with state and federal government officials, increasing the costs to businesses and lowering the benefit received by employees. Governments impose these costs and regulations to take care of employees and employers, whether they want to be taken care of or not.

There is a way for both workers and businesses to free themselves of many of these burdens, reduce costs, keep more money and protect their privacy. Becoming an independent contractor instead of being an employee, or hiring independent contractors instead of employees, does all of that and reduces the amount of regulation that must be complied with, reduces legal risks, and can reduce taxes for both. This means there are more resources to share between workers and firms.

Employees Suffer

Even though most of government regulation claims to protect employees, it has had the opposite effect. The marketplace changes much faster than government regulation. Government regulation is designed for a business world that existed 50 years ago. There is no way that regulation by a slow moving, democratic government that has to make weekend deals just to keep from being shut down can keep pace with a 21st century information age economy.

Healthcare has been designed around a system where employees work at the same company for most of their life. Today, the average worker will change jobs many times in their lifetime. Minimum wage and overtime pay was formulated when there was no competition from overseas labor. Even the way that companies account for and fund their benefits and pensions makes them extremely expensive for employees with diminishing value. One of the worst parts of all is that employees have little control over the taxes they pay.

Employees Have Little Control Over Their Own Life

There is no doubt that some of these protections benefited employees overall at one time. Some may even be helpful today. But an employee has no choice whether they want to participate in these systems, even if they could get the same benefits elsewhere for less. Employees have no control over their economic life.

Control over your own economic life is valuable, not only in terms of mental health and a feeling of self worth and independence, but also economically. Something as simple as being able to control more of the taxes you pay can have a dramatic impact on your financial well being.

How A Worker Can Pay $0 In Federal Income Taxes

The Wall Street Journal recently did a case study showing how an independent contractor can earn $150,000 in gross earnings in a year, take a few very common tax deductions, and have a federal income tax liability of $0.

Here’s how it breaks down:

$150,000 income as a self employed independent contractor.

  –$7,000 business start up expenses ($10,00 max first year, $5,000 in subsequent years)

  –$10,000 legitimate business expenses

  –$9,500 Medicare and Social Security tax (half of $19,000 paid)

  –$43,100 401k contribution (you deduct both employee and employer portion)

  –$10,000 IRA contribution ($5,00 for you, $5,000 for a spouse)

  –$10,000 state and local taxes (estimated)

  –$10,000 mortgage interest

  –$10,000 health insurance premiums

  –$6,150 Health Savings account

  –$2,500 interest on student loan

  –$4,000 kid’s college tuition

  –$1,500 tax credits (buy hybrid vehicle, install solar panels, etc.)

  –$200 Lifetime Earning Credits (community college class)

= tax liability of $0 on $150,000 income.

Independent Contractors Pay Less Taxes Than Employees

This entire strategy is premised on a very important issue. To take advantage of these huge tax benefits you cannot be a regular employee. You can take advantage of every one of these tax benefits as an independent contractor. A regular employee would pay taxes on close to the full amount of that $150,000 of income.

Employers Pay Extremely High Labor Costs

Employees cost their employers a lot more than their hourly wage. Unemployment tax, ERISA, and Medicare costs alone are 15% of the total salary paid to employees. Employers also pay an average of $7,500 per employee in health insurance every year, something required when the firm has 50 or more employees.

High Administrative Costs And Risks For Employers

On top of these direct costs, there are numerous other regulations that must be complied with, even if it does not make economic sense. Employers are required to give family leave under certain circumstances, have detailed record keeping requirements, and many other things that raise the cost of having employees and decrease profitability, without actually paying workers more.

Employers are also exposed to lots of litigation risk. Whether it is an employee discrimination suit, failing to comply with regulation, harassment, overtime, even a conscientious employer can find themselves in an expensive, often frivolous, lawsuit. A lot of these costs and regulations are preventing businesses from hiring employees.

Independent Contractors Reduce Labor Costs And Increase Productivity

Businesses can still get the work done that they need to get done without incurring these huge costs by hiring independent contractors instead of employees. Independent contractors are also easier to train, more productive and provide a lot of flexibility in changing economic times.

IRS Scrutiny

These economic benefits have attracted a lot of workers and firms to try independent contractors instead of employees, but beware. The IRS and the Department of Labor have begun cracking down on those who do it wrong. Doing it wrong could mean having to pay back taxes and interest owed, or even paying penalties or overtime.

Follow The IRS 20 Factor Test

There is a way to do it right. The IRS has a 20 factor test that they use to determine if the worker is an employee or an independent contractor. This list is very fact specific and the weight given to every factor will depend on what other factors may reveal.

Independent Contractor Should Control Their Own Work

One of the most important things to consider is the amount of control that the firm has over the worker. An independent contractor will have control over their schedule and how they perform the work. The firm will control what they want the outcome or finished product to be. Suggestions are permitted but they must be suggestions. This is becoming much easier with the ability to work remotely over the internet.

Independent Contractor Can Do Work For Others At The Same Time

Another important factor is that the independent contractor is free to do work for others as well. This can be a critical factor that the IRS or Department of Labor look at. It is much better if the independent contractor is doing jobs for other clients, or at least advertising in places like Craigslist for other clients.

Independent Contracting Is A Win-Win

Independent contractors allow workers and firms to share more money between themselves. The government is entitled to much less of the money that flows from firms to independent contractors than employers and employees. Businesses become more profitable, individuals keep more money and everyone increases their privacy. Independent contractors can also have more control over their tax domicile, a more advanced but much more powerful tax saving strategy.

Conclusion

This is only scratching the surface of how to properly take advantage of this powerful strategy. Secrets of Independent Contractors, from HowToVanish.com is a simple and complete guide to help businesses and workers properly structure their relationship so they can take advantage of the huge tax savings.

Reprinted with permission from How to Vanish.

Bill Rounds, J.D. is a California attorney. He holds a degree in Accounting from the University of Utah and a law degree from California Western School of Law. He practices civil litigation, domestic and foreign business entity formation and transactions, criminal defense and privacy law. He is a strong advocate of personal and financial freedom and civil liberties.

The Best of Bill Rounds