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Originally Posted by Shoonra
(a) It is not at all clear that an FRN is, in law, a "debt instrument". The statutes describe FRNs as "legal tender for all debts, public charges, taxes, and dues." 31 USC sec 5103.
At least two unpublished court decisions have rejected the tax dodge founded on the notion that FRNs are "debt instruments": Galbreath v. Dept of Revenue (Ore. Tax Magis. Div. 7/24/07), and US v. Jungles (ND IL 6/7/88) aff'd 903 F2d 468, 66 AFTR2d 5048, 90 US Tax Cases para 50289.
(b) Some twit came up with the notion that a debt cannot be paid with a "debt instrument". Not true. A US Treasury Bond is undeniably a debt instrument, and I would (and almost any sensible person would) accept it for payment infinitely faster than the worthless POMCs that DiM tries to pass.
(c) The courts have said, repeatedly, that FRNs are money - countable for the purposes of taxation - and, perhaps more important, the medium with which taxes are to be paid.
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Shoonra: it say's FEDERAL RESERVE NOTE right on it. Is a note not debt? Is it a promise to pay?
I don't know if you can pay debt with debt by law. We do it with credit cards all the time, checks and so on. So, I would have to go with you on that, that it is legal to do so. Unless someone want's to point it out as fact.