Tuesday, July 27, 2010

IRS Clarification on 1099 Forms for Gold and Silver Coins

The requirement tucked inside the Healthcare Bill that requires gold coin dealers to file 1099 forms on anyone buying or selling coins with a value of over $600, apparently goes way beyond just coins.

The provision also applies for any other goods worth over $600 bought or sold by businesses of all sizes, charities and other tax-exempt organizations, and government entities.

But, the IRS has already issued one clarification given the uproar. Purchases made by credit cards and debit cards will not have to be reported.

Obviously, the provision is about attempting to track cash flows (particularly from gold and silver sales).

Indeed, according to the National Taxpayer Advocate (a taxpayer "advocate" department within the IRS), "the new information reporting requirements are likely intended to detect unreported income or gross proceeds."

Bottom line: More than anything, the provision is about getting the names and Tax ID's of those buying and selling gold and silver coins.


  1. If a credit card purchase occurs in the forest and no one is around to fill out a 1099, does it go unreported?

    Answer: of course not. Government can and does snoop on credit card transactions whenever it damn well pleases. That stuff is routed through the banking industry which is wholly compromised. So, this piece of legislation effectively encircles all possible avenues (of escape).

  2. Is this just a lowering of the old 1099 threshold of $10,000 on cash transactions? One would think in an inflationary economy such as ours, the hurdle would go up, not down.

  3. I saw this news the other day and then just saw this today: Why do U.S. asset managers fear government confiscation of gold?

    Add that together and things are going to get even more interesting in the gold market I think.

  4. This is one of those regulations that will have an interesting time surviving after the November elections. The IRS does not have the EXISTING resources to tackle this without a very significant budget increase. Hundreds of new agents will need to be hired to tackle just this provision. Without additional budget increases, the IRS is not able to enforce this.

    That's IF it manages to survive by 2012, to boot. I can't wait until after the November elections to see what happens to Obamacare. IF the Republicans take the House and the Senate (very, very, very big if), Obama will become the ultimate political whore so he can get something, anything done before he leaves office. The Republicans are drooling like starved bears to tackle this. It is fresh red meat they can feed their constituents; 'Hey look, we're doing our jobs by gutting XYZ!'

  5. It should also be mentioned this provision is not about bullion, per se. It is for *ANY* company purchase over $600. From the original article at CNN Money:

    "Section 9006 of the health care bill mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they BUY more than $600 in goods or services in a tax year."


    On the flip side, more congressional action and rhetoric by Republicans is certainly coming. The party sees this as something they can beat over the Democrats' heads relentlessly. Another Senate Republican has taken up the drumbeat alongside House Rep. Lungren:

    Sen. Mike Johanns (R-Neb.) this week continued his push to eliminate a controversial tax-reporting provision of the new healthcare reform law, vowing to offer his repeal bill at every turn.

    “I will file this amendment on every viable vehicle that comes to the Senate floor,” Johanns said Monday at a healthcare forum hosted by the U.S. Chamber of Commerce. “Sooner or later, we’ll get a vote and we’ll see who stands with our job creators and who does not.”


    Hm. Might be something to start a blog on. :)

  6. The rule says any trans over $600 a year. If silver trans's are kept under $600 at a time and is bought from diff sources then who is to know, UNLESS its all kept on a mainframe at the IRS under your name or SS# but there wouldn't be 1099's if no $600 trigger, correct?

  7. Cash transactions are reported on form 8300 as always. 1099 forms are issued when you sell, just like when you sell stock or a home. They have been required for many years. The threshold has always been $600. The new provision just tried to provide for better compliance of existing taxes. I pay my taxes, so I don't have much sympathy for tax evaders.

  8. Is there a time constraint associated with each transaction over $600?

  9. This story is nonsense. The Healthcare bill has a 1099 provision to make sure that people are paying the taxes they are supposed to be paying all along. Lawyers, doctors, and other professional "independent contractors" never before have had their incomes reported to the government just like average Americans have had done for 70 years. Honest people should be glad that the tax evaders are having to pay their share like everyone else.