A new Internal Revenue Service ruling may stir
thousands of coin dealers -- who stopped selling bullion
products in the 1980's because of burdensome reporting
requirements -- to once again sell bullion without fear
of running afoul of government regulations.
The new regulation "Revenue Procedure 92-103" states
that information returns filed on Form 1099-B are only
necessary when sales are equal to or exceed Commodity
Futures Trading Commission contract sizes. For gold
bars, the contract or sales size is 1 kilo (32.15 oz.)
with fineness of at least .995. For 1-ounce gold Maple
Leafs and 1-ounce gold Krugerrands the sales size is 25
coins. No other gold investment products are subject to
IRS reporting. Amounts for silver, platinum, and
palladium products are also detailed in the ruling.
Since a 1982 IRS ruling, it was widely assumed that
all retail bullion sales required a report to the IRS.
The cost and burden of that reporting, coupled with
increased government audits and rigid but arbitrary
enforcement, has caused perhaps as many as 5,000 small
coin dealers and metals brokers to leave the precious
metals bullion business in recent years, according to the
Industry Council for Tangible Assets which fought for ten
years to change the regulations.
Many of the thousands of coin dealers who stopped
selling bullion products out of fear, confusion and
uncertainty over the previous ruling should now feel
sufficiently confident to reestablish sales and service
to their customers.
The prospect of thousands of coin dealers and
bullion brokers reemerging as active sales entities for
bullion, bar and coin products can be viewed as a highly
positive development not only for the coin dealer
community but the precious metals industry as a whole.
