Revisiting Reportable Bullion & Cash Transactions
By Richard Schwary – California Numismatic Investments (www.golddealer.com)
It is hard to believe it has been a year (May 23,
2011) since my first comments about government reporting requirements within the coin business. I called
this effort Rules
for Reportable Bullion & Cash Transactions or Lack Thereof and it received comments
which are included in this second attempt along with new information.
The subject of “reporting”
has to be one of the most
misunderstood and misrepresented
in the trade today so I can’t figure out why you don’t
about these rules?
The reason might be that these
mystical directions while
holding sway over dealers are a
poorly written mess which should have been avoided more than 30 years ago. And as the perceived need came and went these rules
were asked to do more than intended without further oversight or revision. So in my opinion what we have today is a bottom up application of government thinking without the required rule maker and so disputes become a nightmare based on not understanding what is obscure.
And with gold reaching
for new highs the mistrust
of government and these famous reporting rules become more important for
two new reasons:
First if you study this situation most will find the majority of Americans are looking for simple privacy and
not trying to skirt the currency reporting laws. Gold has always been the most private investment and the use of “no-name”
invoices and cash in smaller
amounts is popular and legal. The quest for privacy is responsible for new books like How to Be Invisible: A Step-By-Step Guide To Protecting Your Assets, Your Identity, And Your Life by J.J. Luna. This type of read is on the front burner because people worry about identity theft and are looking at privacy especially
as it relates to the Internet.
Second the notion of independent storage of precious metals is getting
publicity because of banking failures both here and in Europe. Outside of bank storage was talked
about in the early gold movement
and included ideas about
out of country storage by pioneers
like Harry Brown. Personally
I think this is an overreaction because US banking oversight protects assets but investors are considering this possibility. I just received a brochure from www.usprivatevaults.com
which reads: Are Your Assets Really
Secure In A Bank Safe Deposit
Box? I have no idea who these folks are but use their advertisement to point out that
independent storage would not be built if there was not a developing market.
When gold was once again made available to Americans in 1975 the modern bullion dealer was reborn. Rare coin dealers at
the time did not have much
to do with bullion transactions
except to facilitate trades for good customers.
There were cash reporting
requirements already on
the books but mostly no one cared
about such things even the banks. If you were given
cash it was deposited into your business account but most of the time payments were made by check. But back then
we lived in a simpler world.
Investors noted how many Krugerrands had to purchased to avoid paying state sales tax which was
the way they used to do things. But when the Treasury began to get interested in what Middle America was doing
with precious metals the “reporting”
idea got more attention. Since that time both dealers and the public have come to believe these reporting requirements are an attempt by Uncle Sam to monitor
the precious metals because the government saw them as a kind of unregistered security which is easy to buy
and easy to sell privately. Perhaps, but I believe the truth is more mundane and the government based their first decisions about
“reporting” more on what
was traded on the nation’s commodity
exchanges and less on what
was happening in coin stores because
they had little interest in the individual investor.
But to understand how this
whole thing unfolded and why I believe much of the “reporting” requirement
jargon is a red herring let’s look at the two areas most talked about by the
bring in more than
$10000.00 in cash or cash equivalents to your dealer he will present you with a Federal
Form 8300 which will require things like your
name, address, and social
Form 8300 is the real
deal and presents serious
legal consequences for both the buyer and the dealer.
So please no winking or playing around here as this has been on the government radar screen since the cash trade in drugs entered America’s living room and more recently
as terror became a
reality in the US.
To make sure professionals
were listening Uncle Sam prosecuted a few famous coin dealers and sent them
to jail. They then published the results in Coin World which scared most national dealers because prior to these prosecutions cash was not a big deal.
Read more: http://chasvoice.blogspot.com/2012/06/how-govt-tracks-your-bullion-and-cash.html#ixzz1yFrMdZjs