Dear Members of Congress & the Biden Administration

Our country continues to endure one of the worst societal disruptions in its history. COVID’s direct and indirect effects have taken the lives of over one million Americans, bankrupted businesses nationwide and further amplified many of the economic imbalances that have eroded our culture for decades. The 2020 and 2022 elections not only reflected a deep desire to return to normalcy, but to build everything back better than it had been before the pandemic.

Following President Biden’s election, much progress was made on his promise to pursue that objective, but some of the most critical parts have languished, particularly those addressing human infrastructure and climate change, in spite of the record levels of support for them found in the Inflation Reduction Act of 2022 (IRA). 

This site lays out a strategy on how we, the citizens of the United States, can tackle many of those problems ourselves, without having to rely on the federal government to do it for us, nor on the taxpayer to finance it—principals both parties can applaud.

What & How

Many of today’s challenges can be traced to growing income and wealth disparity. Lack of money is at the root of many seemingly unsolvable societal problems. Historically, communities have looked to the federal government to address that lack, on the assumption that all money comes from the government.

The reality is that the government is not the only entity allowed to issue money. We private citizens and businesses can too, and throughout U.S. history, we often have, according to this 2008 article published by the Federal Reserve Bank of Cleveland titled Private Money in our Past, Present, and Future..2

“Who is allowed to issue money in the United States? The founding fathers made it clear that the power to create money would not be taken lightly. Their experiences with money and inflation during the Revolutionary War made them wary of paper money and conscious of the power wielded by those authorized to create it. They gave Congress the right to issue money and forbade the states from doing so. But the federal government isn’t the only entity that has, in practice, issued money. Private citizens and private companies have, too. . .”3

And therein lies a key to helping address the scarcity of money in the productive economy. The government calls money issued by private parties “virtual currencies”. As citizens of the United States, we can issue our own money as a virtual currency and use it to solve the kinds of problems listed below and more. This is not to be confused with cryptocurrencies (a form of virtual currency issued by private parties) which are driven by profit making objectives. The kind of virtual currencies we advocate for  are ones designed to uplift all members of society and not just make some people wealthy, although they are primarily intended to aid those less fortunate than others, as described next.

Who is this intended to help?

The following graphic depicts how the current financial eco system does not equally serve all of society. In fact, there are two groups who are impacted by the current system, one of which largely benefits from it (Tier 1) and the other that is either negatively impacted or for the most part, does not participate in it at all (Tier 2). The concept of virtual currencies are intended to primarily serve the citizens in Tier 2. Following that graphic is a table that lists some of the things that can be addressed with virtual currencies, all of which can be greatly enhanced and facilitated by the changes in taxation recommended herein with respect to virtual currencies.


Examples of What Can be Done with Citizen-issued Money

Job creation programs

Fully funded K – post secondary education

Solvent state & local governments

Startup grants

Fully funded pre-K programs

Pension plans fully funded

Basic income grants

Healthcare for all

Renewable energy programs

Small business grants & loans

Day care for children & elderly

Blight remediation programs

Full employment & living wages

In-home care for children, elderly & infirm

Clean air & water

Student grants & loans

Paid family leave

Sustainable local agriculture

Tuition-free colleges, vocational & entrepreneurship training

Elimination of homelessness

Food grant programs

Elimination of student debt

Elimination of foreclosures

Rent aid 



Regulations in the Way

However, our ability to do so is hampered by specific federal laws and regulations, the most significant of which relates to taxation. Currently the Internal Revenue Service treats all transactions in virtual currencies as though they are conducted in U.S. dollars. Further, it requires that taxpayers pay the IRS any tax due in dollars, rather than the virtual currency.

So, even if communities wanted to issue their own money to fund job creation programs and other expenditures, they would effectively be blocked from doing so because of a lack of dollars to pay any taxes resulting from those economic activities. Thus, even though we citizens can issue our own money legally, there are limits on how such money can be used effectively today.

A Possible Solution

What if the federal government were to accept alternative currencies for payment of fees and taxes. Such a prospect is more viable than one might imagine.

That’s because of action by the Internal Revenue Service Advisory Council (IRSAC), a long-standing IRS advisory group created by Congress to analyze tax issues and make recommendations to the IRS. In 2018, the IRSAC was asked for suggestions on how to focus guidance to taxpayers on the use of virtual currencies (their term for complementary currencies).

In their year-end Public Report the IRSAC noted that, “Use of virtual currency as a payment method has grown in popularity and has emerged as an alternative to using fiat currencies (i.e., government-issued currency).” The report went on to say that “Virtual currency poses tax compliance risks [arising] from non-willful conduct by a taxpayer (e.g., lack of understanding regarding the taxability of virtual currency transactions, how to calculate basis of gain/loss from virtual currency transactions, how to characterize income, third-party reporting responsibilities, etc.). Compliance risks can also arise from willful conduct by a taxpayer (e.g., using virtual currency to evade taxes).”

One of the key questions addressed by the IRSAC concerned the idea of the IRS accepting virtual currencies for payment of taxes. The IRSAC concluded that the IRS is already authorized to do so. Not only that, but the IRSAC recommended that the IRS should do so! Section 6311(a) provides that the IRS may receive “any commercially acceptable means [of payment of tax] that the Secretary deems appropriate to the extent and under the conditions provided in regulations prescribed by the Secretary.”

In that report, the IRSAC recommended that IRS: “Accept payment of tax liabilities with virtual currency. If the regulations under section 6311 were amended to provide for the payment of tax through virtual currency, the IRS could leverage the information and experience obtained from voluntary payments of virtual currency to strengthen enforced collections.”

This would solve a HUGE problem for anyone receiving a payment in a virtual currency that IRS would consider taxable, and as stated above, the IRS requires the taxpayer to pay the taxes due the IRS in dollars, not the virtual currency. So, if anyone were to pay employees, in whole or part in a complementary currency, the employer and the employee would have to pay any taxes due the IRS in dollars. Obviously very convenient for the IRS but VERY inconvenient for the tax payers.

However, even though the IRS accepted and adopted a number of the recommendations in that report, they elected not to adopt this recommendation. When asked why by a senior U.S. Senator why not, the IRS replied:

“The position of the IRS is that virtual currency is property. See Notice 2014-21. Virtual currency does not have legal tender status in the United States and transactions with virtual currency are treated like transactions in any other property for tax purposes. There is no provision of federal law under which taxes may be paid by a voluntary transfer of real or personal property to the federal government…”

Note that they say “voluntary.” That does not mean that the IRS cannot accept property for payment of taxes. The Service has long seized property “involuntarily” from tax payers for payment of taxes, so systems are in place to handle receipt of property of all types.

This Could Create Massive Problems for the IRS

However, while the above solution would be very tax-payer friendly it would be a nightmare for the IRS. There are currently thousands of alternative currencies in circulation today, many in the form of cryptocurrencies and many others that are not. In any case, accepting all manner of virtual currencies would likely be an unmanageable task for the IRS. Is there a easier solution? Yes, here it is.

A Better Solution

The remedy is relatively easy and either Congress or the president can implement it. In the case of Congress, a small rider attached to just about any bill would do it; for the president, a simple executive order is sufficient.

We are calling on Congress to enact a small piece of legislation that will dramatically enhance the ability of citizens to issue their own money without incurring any tax liability at all. Alternatively, we call on President Biden to mandate the same via an executive order.



People's Money

At the heart of this proposal is the good fortune that “we the people” are able to issue our own money and use it to address our own needs. Both domestically and abroad, this practice has been commonplace for centuries and remains a standard practice worldwide.

In the U.S., non-federal currencies that go by various names such as local, regional or community currencies have been used throughout our history, first as paper money and now increasingly issued digitally.

They come in many familiar forms, from popular “Buy Local” campaigns, to credit card mileage awards and, most commonly, coupons that Americans use daily. (Local virtual currencies should not be confused with “crypto” currencies which are speculative, regulated securities. By contrast, local virtual currencies are simply mediums of exchange, transacted now digitally, similar to how debit cards, mobile wallets or banking apps work.) 

That FED article mentioned above states clearly:

“The government isn’t the only entity allowed to issue money. Pri­vate citizens and businesses can too, and throughout U.S. history, they often have.”

Done right, a local currency can effectively bootstrap a local economy, allowing the people to lift themselves up rather than rely on external sources like banks or the federal government for assistance. However, successfully launching a local currency requires educating a sufficiently large group of individuals and businesses on the benefits of using a local currency just as they would use U.S. dollars. Unfortunately, current federal tax policy inhibits achievement of this critical mass.

Currently, when two or more parties exchange goods or services using any form of currency, the IRS considers such transactions taxable (as if they were conducted in US dollars) if they exceed the thresholds that trigger taxability. The problem is the IRS requires the tax to be paid in dollars rather than the currency used. The net effect is that many local economic development programs, based on the issuance of a local currency, die before they get off the ground, or expire before delivering sustainable benefits to their communities.

However, if all transactions using non-profit issued currencies were to be exempt from federal taxation, even for a prescribed period of time, then many such programs would be enabled.

How Can the Federal Government Help?

The Congressional Solution

A small rider attached to just about any bill would address this taxation problem. Doing so would have profound, positive and lasting impact.

The proposed rider would require the IRS to exempt certain community virtual currencies from federal taxation, and require the Federal Reserve to purchase those currencies from banks and credit unions. Here is the essence of our recommendation:

  1. Require the IRS to exempt from federal taxation all transactions in community virtual currencies issued for regional economic development purposes by non-profit organizations registered under IRS section 501(c)(3) or 501(c)(4).
  2. Require the Treasury or the Federal Reserve to purchase those community virtual currencies from banks and credit unions. That would free up local banks’ and credit unions’ balance sheets and enable them to deploy vital capital critical to their communities’ stability and growth.

And while simple in concept, the ramifications of these two elements being enacted would be hard to overestimate—their inclusion and passage in any bill will have profound impact. Taking these two simple steps will greatly enhance the ability of local economic development groups to bootstrap jobs programs, accelerate infrastructure improvements, address food insecurity, and much more—all activities ultimately resulting in increased regional GDP, aiding small business, improving community assets, and advancing future bankability.

This page4 provides the proposed text of the rider.

The Administrative Solution

Even though the above Congressional proposal should be supported on both sides of the aisle, the current partisan divide could complicate or delay its implementation.

Fortunately, there is an alternative. Given the nature of the changes required in taxation, those can be applied within the Internal Revenue Service. The IRS is an agency of the Department of the Treasury, part of the executive branch of government and therefore under the control of the president.

President Biden can issue an executive order5 to require the IRS, under the auspices of the Secretary of the Treasury, to exempt from federal taxation all transactions in community virtual currencies issued for regional economic development purposes by non-profit organizations registered under IRS section 501(c)(3) or 501(c)(4) under the existing rules concerning exempt activities on the part of such non-profits. (For a more in-depth exploration of executive orders, see this Congressional Research Service document Executive Orders: An Introduction).6

In addition, the President can mandate that the Department of the Treasury purchase those community virtual currencies from banks and credit unions, along with other mandates to agencies under the control of the administration. Several other agencies are independent and therefore not subject to an executive order. Nonetheless, the president can request that they take action to support this effort.

This page7 provides the proposed text of that executive order and what it entails.


What Can Be Done with this Concept?

The document, Virtual Currencies, IRS, Treasury & Federal Reserve8 provides an in-depth look at complementary currencies and how making some exempt from taxation can have a widespread and positive impact on society. And this document, Troubled Asset Acquisition Program: Tackling Debt & Blight.9 provides a detailed exploration of a couple of key, but profoundly impactful things, that can be done if this proposal is adopted.


The following page10 lists individuals and organizations, along with individual letters and other documents explaining why they support this concept .