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Court Clarifies Views On "Home Storage IRA" Precious Metals

gold and silver coins
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EDITOR'S NOTE: A recent court case decision will have major ramifications for your retirement account. Judge Robert Goeke just ruled that Andrew and Donna McNulty owe the IRS $411,000 in back taxes for home storage of their gold and silver American Eagle coins as part of their IRA. The McNulty’s did it the “right” way, setting up an LLC and a separate bank account as their IRA company advised them, but the judge ruled that having the coins at home still represented “unfettered control” of the assets, and the couple now owe the taxes. This is a major clarification of the law around holding gold and silver in your IRA. Converting at least some of your IRA or Roth IRA to gold and silver It is still something you can — and probably should in many cases — do, but you need to store the gold in a secure location under your name that the government approves of in order not to pay the taxes on the assets. Before diversifying your retirement accounts with gold and silver, make sure to check that the company you are working with knows these rules and sells you the precious metals in a way that won’t cost you thousands in taxes.

In a recent tax court case, Andrew McNulty et al. v. Commissioner of Internal Revenue, judge Robert Goeke ruled that the physical storage of $411,000 in gold and silver American Eagle coins in a safe at home constituted “unfettered control” of the investment and would thus be considered a taxable payout from the IRA in the amount of $411,000.

Donna McNulty argued unsuccessfully that she had opened a separate bank account in the name of an LLC, documented the purchase of coins, and labeled the coins as the property of her IRA-owned LLC when depositing them into her home safe.

For several years false advertising in the form of television, radio, and internet promotions have suggested that buyers could store assets of gold and silver bullion coins in their own homes or safety deposit boxes as part of an IRA account. The advertisements often misinterpret IRS guidance that allows for two-step transactions, claiming that an investor could use a “checkbook LLC” to circumvent enforcement of tax laws meant to prevent an IRA owner from direct possession of IRA assets.

In response to inquiries, the IRS clarified its views on “home storage” and the use of an LLC set up as self-managed by the IRA owner to purchase and hold investments in gold and silver coins, warning that IRA owners cannot do indirectly what they cannot do directly.

No one should be shocked by this decision. NCBA has long warned against the practice, including publishing a white paper on the subject in 2018, “The Prohibition on Home Storage of Bullion Held in an IRA.” In that paper, NCBA explains in detail how this two-step process-setting up an LLC to “hold” the gold and silver investments, which are then stored at home or in a safety deposit box-is a violation of Section 408 of the Internal Revenue Code, and even used the exact same circumstances occurring in the McNulty tax court decision as a hypothetical case.

One of the advantages of membership in NCBA is the assurance that information provided to members has been carefully and thoroughly researched. Had the McNultys been NCBA members, they might have taken these warnings seriously-or, at a minimum, consulted a CPA or tax attorney before following the investment strategy that has now resulted in tax assessments and penalties exceeding $300,000.


Jimmy Hayes is a numismatist, Coalition for Equitable Regulation and Taxation (CERT) consultant, and former member of Congress. He has also served as Commissioner of Financial Institutions and Commissioner of Securities in Louisiana. Jimmy Hayes and Anthony J. Correro (Securities professor at LSU Law School) wrote the current Louisiana Securities Code.

CERT is a separate entity that functions as the lobbying arm of NCBA. As such, it is at the forefront of industry efforts to educate state and federal government leaders, legislative representatives and staff, and the public regarding issues of concern to the coins, currency, and precious-metals bullion communities.

We wish to thank NCBA members Gary Linthicum (Universal Coin & Bullion) and Scott Schwartz (FideliTrade) for giving NCBA a heads-up on this breaking news.

Originally posted on National Coin & Bullion Association.

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