Selected Facts About I.R.S. Reporting

We have included this chapter because investors are not aware that your friendly government is interested in some aspects of the precious metals. Frankly they should be minding more important areas of the nation, but who are we to criticize Uncle Sam? Besides he is very serious about rules, most of which serve to confuse everyone.

There has always been speculation about reporting rules. Some say they were designed to track money laundering in the United States. We find this difficult to believe as most bullion transactions are done over the phone and paid by check. Large cash transactions have been non-existent since the 1970s when cash reporting rules were passed into law.

Most people will buy the idea that large cash reporting is a good idea if it is linked to something like trading drugs. But many think that such government prattle is just a cover up for a more clandestine notion. And here is what everyone is thinking but few will write about: The I.R.S. rules which apply to cash transactions are fine, but why are those same rules extended to cover certain bullion coins and bars? Why does the government want to know when you sell something that is rightfully yours?

If Uncle Sam has faith in the way he is handling our money supply why should he be interested in who owns gold or silver? The reason may relate to the fact that the last time our currency and country was in real trouble was during the depression. And it was during this time (1933) that the right to own gold was taken away from Americans. Use this link to view our special report entitled The Confiscation Dilemma & America's 8 Piece Gold Set.

Some now believe our government is nervous about its currency and wants to track gold ownership in case of an emergency. We will leave this speculation up to you but should something like this happen the price of all hard assets will move dramatically higher.

The following is what The Industry Council For Tangible Assets has to offer about what the I.R.S. wants in the way of paper work. They are describing the paper work provided by bullion dealers which relate to what you purchase or sell. These rules are taken from the ICTA newsletter Washington Wire dated December, 2004. Call Brent toll free at 1-800-225-7531 if you would like a copy.

First: You can place any size order and pay with a check. No one cares, not even the government. The only time they want to hear from us is if you invest more than $10,000 in cash. Then you must fill out I.R.S. Form 8300. There is nothing wrong with large cash transactions, but the government wants to know about them. And, by the way, you can't spend $5000 today and $6000 tomorrow, for Uncle Sam does not like to be fooled.

Second: There are rules which apply only to bullion and only when you sell. They have nothing to do with your purchases, and do not apply to rare coins. Kilo bars are 32.15 troy ounces of gold and are subject to reporting. We are also required to report any gold bar sale totalling 32.15 ounces are more. Concerning 1 troy oz. gold coin transactions: If you sell 25 coins or more of the Krugerrand, Maple Leaf or Mexican Gold Onza we are required to report them on I.R.S. Form 1099B. Such reporting is not required on transactions involving the U.S. Gold Eagle the Australian Kangaroo or the Austrian Philharmonic. There is also no reporting on any small gold bullion coins.

Third: We are required to report $1000 face 90% silver bags and 1000 ounce silver bar transactions only when you sell to us. We are not asked to report the sale of 40% bags or less than $1000 face in 90% silver coin. The 10 and 1 ounce silver bar is exempt as long as the sale does not exceed 1000 ounces.

Fourth: Platinum or palladium bars in quantities of 25 ounces or more are reportable. Platinum bullion coins like the Canadian Maple Leaf, the U.S. platinum Eagle, or the Australian Koala are exempt. Palladium bullion coins like the Russian Ballerina are exempt. If these rules seem arbitrary we don't blame you. We believe our government based their decisions on what was traded on the nation's commodity exchanges and had little to do with what was happening in coin stores across America.