Today’s market uncertainties are once again peaking interest in precious metals home storage IRAs. The frenzy is being exacerbated by a number of unscrupulous promoters advertising on television, radio and the internet, representing the opportunity as a “one size fits all.” But nothing could be further from the truth. Qualifications for a home storage IRA are substantial, moreover the “home storage” and “IRA checkbook” aspects discussed by promoters are not only typically misrepresented, but quite possibly financially dangerous.
Penalties for non-compliance can be quite severe and due to the difficult nature of compliance, the IRS takes long and in-depth looks at those filers, particularly those of more common and traditional filing histories. At the end of this article I’ll provide a link to an attorney’s analysis of the opportunity, which includes the difficult and specific requirements that are conveniently glossed over by the aforementioned unscrupulous promoters and some examples of the potentially sizable penalties that can be enforced.
Even for those who can qualify, the “ease” described by these promoters is a fallacy. And the metal is not sitting in the owner’s shoe box or a safe in the closet. An IRS alert was issued last September, warning taxpayers that “home storage” metals must be in the physical possession of the IRA trustee or provider, not the account holder. Some promoters infer that a safe deposit box in a bank qualifies, under the theory that the bank is an IRA provider. But banks are not custodians or trustees and they are not responsible for the accounting, loss, or insurance of the contents in the safe deposit box.
Suffice it to say that the very great majority of taxpayers are not likely candidates for a precious metals home storage IRA. In a Wall Street Journal article on the topic, Laura Sanders said that it’s important to note that the promoters of home storage plans are careful to include “fine print” language on their materials stating that they don’t take any responsibility for the idea or legality of the plan. Attorney Seth Pierce wrote an intelligent and detailed article on the legal twists and turns of the precious metals home storage IRA opportunity. Click here if you’d be interested to read about the issue in far greater detail.