As a member of BREAD, I would like to offer a correction to the front-page story about the local currency project on Jan. 14. The article misrepresents BREAD as a program that “allows for small-scale tax evasion.”
On the contrary, local currencies have been in existence for more than a decade and are completely lawful. BREAD is a local currency system that puts the community in control of its money - keeping wealth within our regional economy and providing low-income people with access to goods and services. BREAD members participate in order to build community and boost our local economy, not to avoid paying taxes.
Upon joining the local exchange program each participant receives a new member kit that explains how to report his/her BREAD income on the Schedule C or C-EZ of IRS Form 1040. BREAD also provides its members with access to IRS resources, such as Publication 525 Taxable and Nontaxable Income for additional information.
Similar to earning tips as restaurant employees or federal dollars as independent contractors, BREAD participants must report their barter income at fair market value. Participants in the Bay Area’s local currency project are generally conscientious and have a vision of creating a better community.
Like me, most BREAD members would be upset that the Berkeley Daily Planet inaccurately portrayed us as ignoring our civic responsibilities of paying income taxes. Please correct the implication that BREAD allows people to ignore their tax responsibilities. To both the nonprofit organization that publishes the BREAD directory and the participants it is clear that BREAD is a lawful currency and that members are obligated to report their barter income.
Additionally, BREAD should be celebrated for its achievements in providing disabled people with access to goods and services, training underemployed people for jobs in the workforce, supporting locally-owned businesses and supplementing low-income families with access to healthy food, among other benefits.
Local currencies are a boon to the country’s social welfare and to our local community and environment.