Precious Metals Reporting Requirements
(Gold, Silver, Platinum, and Palladium)
In many ways precious metals can offer privacy not available in other investments. Precious metals can be held privately and passed on privately to heirs. Wanting to hold your assets privately is not criminal, immoral, or unpatriotic. Wanting to be private about your precious metals holdings is actually prudent when you consider the possibility of theft.
What follows are some of the laws regarding the reporting of precious metals transactions.
If you purchase precious metals using a wire transfer, check, or credit card there is no reporting requirement because there is already a bank record of this transaction. You can place an order for any amount using a wire and there is no specific reporting requirement. Due to anti-money laundering laws, any cash purchase (including money orders and cashier's checks) of $10,000 or more must be reported by the precious metals dealer with IRS Form 8300.
The defined time window of this $10,000 sale is 24 hours. Under the letter of the law, if a customer purchased $9,000 in precious metals with cash and then, 48 hours later, purchased another $9,000 with cash there would not be a reporting requirement. Even so, while this is technically legal, the U.S. government looks at these types of transactions with suspicion and expects precious metals dealers to report them as suspicious activity.
This type of attitude by the government makes it difficult for Americans to know how to conduct their affairs. The vast majority of Americans looking for privacy are simply being prudent and are not trying to launder money or sponsor terrorism. Also, it is a basic principle of law is that laws determine where the line of activity should be drawn. Laws should tell a law abiding citizen to know how far they can go and still be conducting their affairs in a legal manner.
In this case it is vague what type of activity could prompt prosecution. The U.S. government has prosecuted many businesses and individuals for repeatedly conducting cash transactions under the $10,000 reporting requirement. For this reason some precious metals dealers and brokerage companies do not accept deposits of less than $10,000.
Be aware that a husband and wife are considered the same person for these transactions, so they could not split up a purchase between them to avoid reporting requirements.
Bullion Products Reporting
The reporting of bullion sales only occurs in certain circumstances when a customer is selling product to a dealer. When certain bullion products are purchased the dealer is required to report the purchase on Form 1099B.
The fine for failing to file a 1099B form is $50 and the fine for failing to file a Form 8300 is $25,000, so based on this the government sees the reporting of cash transactions as far more important. The law on the reporting of bullion products predates many of the most popular products and has not been updated. If the government was specifically interested in tracking precious metals sales we would expect that more recent laws would have been passed.
BULLION PRODUCTS WITH SPECIFIC REPORTING REQUIREMENTS
- Gold bars of 1 kilo (32.15 oz) or more
- $1000 face value 90% silver bags
- 25 or more ounces of platinum or palladium coins or bars (see exceptions below)
- 1000 ounce silver bars
- 25 or more one-ounce gold South African Krugerrands, Canadian Maple Leafs, or Mexican Gold Onzas within a 24-hour time frame.
BULLION PRODUCTS WITHOUT SPECIFIC REPORTING REQUIREMENTS
- Silver 1 ounce, 10 ounce, and 100 ounce bars and coins as long as the total does not exceed 1000 ounces
- Platinum U.S. Eagles, Canadian Maple Leafs, Australian Platypus, and Australian Koalas
- Palladium Canadian Maple Leafs, Russian Ballerinas
- Gold U.S. Eagles, Australian Kangaroos, Austrian Philharmonics, Chinese Pandas, British Britannias, Australian Lunars, and any fractional bullion coins in 1/10, 1/4, or 1/2 ounce sizes.