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Are My Silver Gold Purchases Reported To The Government?

The psychological allure of investing in precious metals often goes far beyond the advertised spot price that is listed in the daily financial papers. Indeed, this emotional response is rooted in thousands of years of human history where the tangible weight and stability of gold or silver metals drove concepts of wealth and financial independence. In the modern age, those notions have not diminished. For many however, the collection of precious metal stocks also serves as a hedge against what they believe is the overreach of fiat currencies.

Additionally, since a historical precedent already exists in the United States of the government moving to confiscate the nation’s gold supply, it makes some investors wary of informing the Treasury Department of their holdings. In 1933, President Franklin Roosevelt took the United States off the gold standard, and for the next four decades it was illegal for American citizens to own gold. While those strictures were ended in 1974, the memory engenders distrust among some in the investment community, so it is understandable that they might wonder whether they need to report their gold and silver purchases to the government. The answer to that question is both yes and no.

Reporting Precious Metals amid Global Threats

As mentioned, it has been legal for Americans to purchase gold and silver bullion products since President Ford removed F.D.R.’s Depression Era prohibitions in 1974. The terrorist attacks of 9/11 altered the equation somewhat, however. Under the hastily passed legislation in the aftermath of those attacks, The Patriot Act placed reporting conditions on certain categories of bullion products to target the money laundering operations of global terrorist groups.

Generally speaking, the law requires governmental reporting when two conditions are met through the purchase:

  • The purchase exceeds $10,000 in a series of “related” transactions
  • The transaction is conducted with cash
  • Certain foreign coinage exchanges

Dealers in precious metals who fail to report these types of transactions are themselves subject to an array of legal implication including fines, criminal charges, and the potential for imprisonment. The vehicle for reporting this information to the Treasury Department is the 8300 form.

The 8300 Form

The 8300 form details financial and personal information to the Treasury Department in the aftermath of a regulated purchase. These details include the buyer’s name, address, social security number, and license information, as well as the amount of money spent on the purchase. To trigger this response requires a purchase in excess of $10,000 in related transactions that is paid for in cash.

What Constitutes a “Related” Transaction?

To stymie efforts to get around reporting requirements, some buyers might try to divide their purchased between two or more payments. Specifically, say they go into a local coin shop and purchase $8,000 in bullion products, only to return within a 24-hour period to buy a further $4,000 in gold or silver with cash, these two transaction would be deemed “related,” and therefore subject to reporting obligations.

What Constitutes “Cash?”

The term “cash” references several payment types when talking about reporting obligations. When utilizing money orders, cashier’s checks, bank drafts, traveler’s checks, United States’ currency, and foreign currency qualifies as “cash” under the nomenclature of the legislation. Payment methods that would not trigger use of an 8300 form include bank wires, personal checks, credit/debit cards or PayPal account transfers.

Buying Bullion in Confidence

Dealing with reputable dealers is the first step in ensuring your privacy and security are protected when it comes to buying gold and silver bullion products. Owing to the dollar amounts involved however, most investors and collectors will not trigger an 8300 form filing under the dictates of the Patriot Act legislation.

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