#fully fund the irs
would this work as a tax evasion scheme? A group of people have accounts with “points”, and they pay each other in points, and at the end of the year they cash out their point balances if positive, or buy more points if negative. So for everything within the point economy, your taxable income is actually income minus expenses, it basically made all expenses within the point economy tax deductable
As a tax *avoidance* scheme, meaning a legal way to reduce taxes, no. This falls under “Bartering Income”, for which the rule is “You must include in gross income in the year of receipt the fair market value of goods or services received from bartering.” So legally you’d have to report the total value of everything you received in the points economy, not the net value at the end of the year.
As a tax *evasion* scheme, meaning an illegal way to under-report your taxes that is hard for the IRS to catch on to, it seems like it has promise. Among other things, there’s probably lots of room to underestimate the fair market value of the stuff that goes into the exchange in ways that would be hard for the IRS to prove is an underestimate (especially with the inadequate enforcement resources it has).
