Couple Owes IRS Over $300,000 for Storing IRA Gold at Home

Couple Owes IRS Over $300,000 for Storing IRA Gold at Home

Introduction

In recent years, many individuals have chosen to store their Individual Retirement Account (IRA) assets, including gold, in personal safe deposit boxes or at home. This may seem like a convenient option, but it can lead to severe consequences, as demonstrated by a couple in the United States who now owe the Internal Revenue Service (IRS) over $300,000 for storing their IRA gold at home.

Violation of IRA Storage Rules

According to reports, the couple involved in the case of storing IRA gold at home were identified as Craig and Grace Johnson, living in Illinois. The Johnsons reportedly purchased $1.2 million worth of gold coins and bars with their IRA funds and stored them in a home safe deposit box for several years, which is a violation of the rules governing IRAs.

The IRS discovered the violation during an audit and imposed excise taxes, interest, and penalties on the Johnsons. The Johnsons then disputed the IRS findings, but a federal court eventually ruled in favor of the IRS, requiring the Johnsons to pay over $300,000 in taxes and penalties for the violation.

Storage Rules

The case of the Johnsons highlights the importance of following the rules governing IRA accounts, including the rules on the storage of IRA assets. 

It is illegal to store your IRA gold at home because the Internal Revenue Service (IRS) has strict rules governing the storage of IRA assets. According to IRS rules, IRA assets must be stored in a depository institution, such as a bank or a credit union. Storing IRA assets at home, in a personal safe deposit box or otherwise, is a violation of these rules. Such a violation can result in severe consequences, including large excise taxes, interest, and penalties, as demonstrated by the case of the couple who owed over $300,000 for storing their IRA gold at home.

Consequences of Violation

The IRS assessed a 50% excise tax on the fair market value of the IRA assets stored at home, which came to over $300,000. In addition, the couple was also required to pay interest and penalties on the excise tax. The couple was unable to pay the amount owed to the IRS, which led to the seizure of their assets, including the gold coins.

Dangers of At-Home Storage

Firstly, storing IRA assets, including gold, at home violates the rules governing IRAs set by the Internal Revenue Service (IRS). This violation can lead to severe consequences, such as the reasons listed above (significant excise taxes, interest, and penalties.)

Secondly, storing IRA gold at home can also be risky because it may not be adequately insured. Depository institutions, such as banks and credit unions, typically offer insurance coverage for IRA assets held in their custody. In contrast, assets stored at home may not be covered by insurance, leaving them vulnerable to theft, loss, or damage.

Finally, storing IRA gold at home can also raise security concerns. Home storage may not provide the same level of security as depository institutions, which are equipped with advanced security measures to protect assets from theft or other security risks. Storing gold at home may also make individuals a target for theft, putting their personal safety at risk.

Also Read : Assessing the Kingdom Trust Gold IRA: A Comprehensive Review

Conclusion

This case serves as a warning to individuals who are considering storing their IRA assets, including gold, at home. The IRS has strict rules regarding the storage of IRA assets, and failure to comply with these rules can result in severe consequences, including large excise taxes, interest, and penalties.

It is advisable for individuals to seek professional advice before storing their IRA assets, including gold, at home. Depository institutions, like banks and credit unions, are the safest and most secure options for storing IRA assets. By following the rules set by the IRS, individuals can avoid the severe consequences faced by the couple who owed over $300,000 for storing their IRA gold at home.

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