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Like I said, IRS incompetence; that leads to the "easy pickins" situation. It's no loophole; it's cat and mouse with bureaucrats, with the hope that your particular case doesn't land on the desk of someone who knows the game.
Off the top of my head, I'd guess that by being a part of a group that's doing this, you are putting yourself into a category of much higher visibility. You make small time money, so they don't care; but what's the collective income, I mean, uh, unconstitutionally taxable amount of money that the IRS would consider income, of the entire group? Together you make a bigger prize with much smaller burden of collection of evidence.
And if you think your copy of Black's with its various definitions of "citizen" and whatnot are the secret code words that get you out of jail free, think again. The law doesn't even pretend at that level of consistency. You'll be flipped by the first Judge you run into. If things like the common law and definitions in Black's got people out of trouble, don't you think the lawyers would know about it? Do you think you and your buddies are the first ones to think of this stuff?
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