IRS & Your Coins

Yeah, you should assume you're being recorded, YOU'RE ON THE WEB! LOL

Okay, all in here can see what's going on. The government is making it easier to track your income/gains and tax them. The tax was legally due on these sales before the changes in the law, yet many were/are not paying the tax by reporting the sales on their tax returns. Most Americans do not have the option of not reporting all of their income, they are wage earners and it all gets reported. So, most Americans should be supporting these changes because, at least in theory, if the government can tax all the income they are supposed to, the bill will be lower for those who are already forced to report all their income.

 

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With a IRA yes you are showing a paper trail
but a Bank safety deposit you are not all the bank know is you pay rent for one.what in there the bank never see's.as they only have 1 key to get to your box to open the door were your box is stored,then you go to a room with out any cameras then you have the 2nd key to open it.

 

I agree that currently this is the press' interpretation of the law, I disagree with a couple of other points. Regarding quantities of 1099's, that is not an issue. Large filers have to send them in electronically, and the IRS scans paper copies in to use. I have been at the facilities, and they currently handle billions of them now. A law like this if implemented will not be a cause of concern for them. The paper is not saved, just the electronic copies which with newer storage systems are not hard to do.

The IRS will never say anything about a new law. They are forbidden to talk about legislative matters. They will only be heard when they have draft Instructions for the 2012 filing year available.

The important point will be the level of enforcement of this. Like I said, this has currently been law and rarely enforced. If the new law forces them to drill down on enforcement many people will be upset, but the law has been the law for a long time now. People have just gotten used to the idea that they shouldn't have to pay taxes on their gains, like people in the stock market have to. I am not sayign how I feel about it, just what it is.

Btw, thanks for the thought I am spying on you, but I am a private citizen who volunteered to help taxpayers get better service from the IRS. In that position, I just interacted with the IRS a lot, so I thought I would share that viewpoint.

 

What a ridiculous comment. There are no cameras in the private rooms where the banks require you to take your safe deposit box once it is taken from the vault. The banks have no idea what is in your safe deposit box unless you tell them. I keep all my coins in my safe deposit box. Do you think I walk into the bank with a sign around me stating – “rare coins ready to be put in my safe deposit box” or do I have them concealed in a box a carrying case??

 

Sorry...just a tad "off topic", but does anyone know who has the avatar of the cute baby with the blue eyes and pink hat?

I'm in a discussion with some ladies here at work and they all say they have the cutest baby...I wanted to show them that avatar...can't remember who it is, though....thanks in advance!

 

My opinion is this law will not pass . Even if it does, most cash and EBAY transactions will fall under the radar just like they do now.

 

It already has passed - it was included in the Healthcare bill.

PayPal and other electronic payment providers will now be required to report transactions to the IRS.

 

I should have said I think it will be repealed.

 

Good point about cash transactions though Mark T. Coin shows will be the wild west of trading, though the IRS could clamp down on dealers who purchase from you documenting purchase price for their own profit recovery. If they did, the dealers would be required to get your name and SSN for their own records to ensure their own compliance. If they did that, who would you sell your coins for cash to? Not trying to stir up controversy, just explain how the IRS has handled situations like this in the past.

 

If someone pays cash for an item they can put whatever information they want on a 1099 form. :-}

 

Not having accounting backgrounds and not having dealt with the IRS, many of you are missing the point in here. If you cheat and want to enjoy the fruits of your cheating, it will show in your lifestyle and the IRS can tax you on your lifestyle, even if records do not exist. As for safe deposit boxes, records do exist. The bank has a record that you have a safe deposit box and what size it is and it has a record for every time you access it, which could be used as circumstantial evidence in conjunction with your coin related activities, to show a possible source of funds to support a lifestyle, not supported by your tax return. And, the IRS could force you to open the safe deposit box with them standing there. As for eBay and PayPal, there is no need to for them to issue 1099's, as using either of them creates a paper trail that can be summonsed by the IRS. When it comes to the IRS, you can run, but you cannot hide. That's why the smart money looks for ways to make more money, not cheat.

 

I do have a financial background degree in accounting. The IRS does not tax you on your life style. The proper way to make that statement would be if you are audited the IRS will take into consideration your spending habits and lifestyle to determine your income and then they can tax and penalize you on what they have determined to be unreported income. A lot of items can be kept in a safe deposit box. How large and how often you go to your safe deposit box is not circumstantial evidence. The IRS does not use circumstantial evidence to prosecute. How often you access you safe deposit box is irrelevant unless they can prove what you had in the box. The IRS has more sophisticated ways of determining if you are a tax cheat, determining how often and how large you safe deposit box probably is not one of them. If the IRS wants to audit you and they suspect you are a tax cheat then they can seize your assets including what is inside your safe deposit box. Want to know when the IRS really cares about your safe deposit box?? It is when you die. If you sell some coins , make a small amount of money and do not report it, the IRS is not going to waste their time with you. They go after the big fish. If you are being audited for something else and they find that you did not pay taxes on the gains you made from your coins sales then they got ya.

 

True the IRS tends to go after the bigger fish due to limited resources, it's a cost benefit game, unless you're caught in a TCMP audit. However you want to put it, you could be taxed based on your lifestyle. In addition, my experience with the IRS shows they are very interest in your safe deposit box - it's one of the initial audit questions (i.e. Do you have a safe deposit box?) and it shows in your bank records. In addition, the IRS can force you to open the box(es) in front of an auditor or CID agent. And, if at some point after you receive an audit notice, you access three large boxes and clean them out, that access can be used against you. Whether or not you want to call it circumstantial, the IRS can and has used safe deposit access records to show how a taxpayer was able to pay for a life style. Now the funds in a box could be from non-taxable sources, but combined with the fact that the taxpayer has no or minimal sources of non-taxable funds and the fact the taxpayer is buying and selling coins would be good enough to convict. I'll admit, when there are no records, it gets very "iffy", so all of the factors mentioned above, as well as others, I call circumstantial, are weighed by the IRS in order to determine if they have a case against you. It should also be noted that a lack of or no records is a factor the IRS considers an indication of fraud.

 

I know what the IRS can and can not do , that’s is easy they can do whatever they want . Access and size of a safe deposit box does not prove a lifestyle . What if the box has no cash or valuable tangible assets ??
I understand where you are coming from and what you are trying to say. There is a lot more to proving someone’s life style then what they have in a safe deposit box.

 

True, the box is just one factor. For example, why do you have three of the largest boxes, all empty and you accessed the boxes after an audit notice was sent? Tuff to answer and just part of the whole picture.

 

Your reasoning is flawed and would not hold up in tax court or any court for that matter. So what if the boxes are empty – maybe someone kept their CD collection in those safe deposit boxes because they felt they were safer there. Do you understand my point ?? You also don’t understand that if the IRS is going to search your safe deposit box , they will seize it prior to you getting notice from them – so you wont have a chance to empty it . Were you ever audited, and what experience do you have with the IRS to come up with these conclusions ? Yes the IRS has a lot of power to do what they want but they still must work within the guidelines of the Law.

 

Like I said, alone, a safe box means nothing, but combined with other factors, it may mean a lot. Yes, they could seize it first or they could later during an audit, it depends what information they have. My reasoning HAS held up in court and if you'd like to search the cases, you'll find so. As for my experience with the IRS, I could tell you, but then I'd have to......

 

A lot of folks get in trouble because they deposit more in the bank than they report on their tax return. Big red flag that's hard to explain. I don't play games with the IRS.
It's not worth the risk of an audit. I could pass 100% but I would still loose because of the cost of my time and what my CPA would charge to deal with it.
It's best to just find ways to make more money.

 

That statement is a great example of why a change is needed in the way taxes are collected; honest people are penalized while crooks (with deep pockets) are rewarded.

Btw, it'll be interesting to see what happens to US Mint gold coin sales once this $600 rule is enforced. I suspect First Spouse sales will continue to decline.