Gold coin sellers angered by new tax law

Jewelry Discussion
21

please, before this descends further into a wildly partisan and fear
spreading, finger pointing, lynch mob, please take a breath and
read:

“The IRS estimates that the federal government loses more than $300
billion each year in tax revenue on income that goes unreported.
Using 1099s to document millions of transactions that now go
untracked is one way to begin to close the gap.”

is that a low estimate of a high estimate…regardless, they’re
saying a LOT of money hasn’t been properly remitted to the taxman.
apparently some of the intent, of this firming up of law already in
place… is to catch cheats…the subject line of this thread is
misleading, imho. would anyone, here, not move to prosecute someone
caught stealing from their home, studio or store?

22

Hi all,

Hopefully this monstrosity will be revised before it hits. It’s a
classic case of cluelessness. Just about every business group in the
country is screaming blue murder about it, and it’ll only get worse.
The IRS isn’t even all that happy about it either. They’re afraid
that they’ll get buried under millions of random 1099’s, without the
people to deal with them. Because they’re all on paper, you see…
Millions of them… To be entered by hand… Without a single
mistake…

It’s been getting pretty regular writeups in the WashPost. From what
they said, it’d apply to ANYBODY you buy more than $600 from in a
year. Staples, Amazon.com, the clown at the auction last week, the
guy at the scrap yard, etc.

The problems with this are simply mind boggling. Nevermind the
catastrophic reporting overhead. Ponder that many small business
owners running around with that many SS#'s. Clearly, every one of
them will have immaculate data security. It’s also going to make life
a lot tougher for small business. Again, nevermind the reporting on
your end. To cut down on reporting overhead, most businesses will
choose to pick a dozen suppliers, and stay with them for everything.
Which will make it incredibly difficult to get them to try your
product.

The idea was to force all transactions onto the books, so the IRS
could get their cut, because they have this belief that there’s
massive under reporting of small business profits. Possibly, but I
suspect this is going to have the opposite effect: force
everything off the books, into cash sales that never get reported
anywhere. The only real question is how you make your books make
sense, when you have large sums of cash “disappearing” every month.
Which leads me to suspect that if this thing actually goes into
effect, you’re going to see an entire country start operating with
two sets of books, which seems just insane.

Brilliant. Force all small business owners into a crash course on
gimmicking their books.

[sigh]
Brian.

23 
a LOT of money hasn't been properly remitted to the taxman.

So the end justifies the means? I don’t think so. Let them figure out
a better way.

Al Balmer
Sun City, AZ

24 
Which leads me to suspect that if this thing actually goes into
effect, you're going to see an entire country start operating with
two sets of books, which seems just insane. Brilliant. Force all
small business owners into a crash course on gimmicking their
books.

Indeed. This has a certain sense of deja vu with me.

In the old days in South Africa, there was a customs and excise tax
of 18% on each transaction when jewellery was sold over R100.00

This caused us to have hundreds of fictitious invoices under R100 to
justify our turn over.

Also when the tax was raised to 35% the customs got less revenue
than at 18%, because everyone was then really cooking the books.

Sounds like there is going to be a whole lot of cooking going on
soon.

Hans

25 
they rather unceremoniously told me that The Patriot Act required
them to have that SS number on file

Like you, I suspect that’s BS. I would have asked them for the
citation.

I’ve just searched the Act
http://thomas.loc.gov/cgi-bin/query/C?c107:./temp/~c1075sIqvH The
only mention of SSN is a directive for a report outlining ways to
require foreign nationals to provide the equivalent of a SSN when
opening an account with a US financial institution. Just like US
citizens already have to do.

Al Balmer
Sun City, AZ

26 
is that a low estimate of a high estimate...regardless, they're
saying a LOT of money hasn't been properly remitted to the taxman.
apparently some of the intent, of this firming up of law already
in place... is to catch cheats...the subject line of this thread is
misleading, imho. would anyone, here, not move to prosecute
someone caught stealing from their home, studio or store?

Wait a minute. You’re saying that we’re stealing because the tax man
isn’t able to squeeze more of our earnings from us?? “Properly”
remitted?? The government loses every dime it steals from us!

I’m not partisan. I don’t care which party holds the reins. But the
feds look upon business as the cash cow to fund all their grand
schemes, and we out here in America have to work; we have no choice.
Gov’t can just make another rule, pass another law, and syphon off
as much capital as they desire; They don’t care if some of us go out
of business because of it because we will always have to pull
ourselves back up to where they can tax us again.

I took two breaths. I read. Seems to me the only partisanship here
is held by two factions: Those of us who believe we have a right to
the fruits of our labors and those of you who believe government has
a right to those fruits.

27

Hi HC,

In order to generate 1099s at the end of the year, I would keep
the I.D. numbers that I collected during the year, in the same way
I keep my cost for income tax purposes. Since the minimum effort
required to keep up with cost is to keep the invoices in a file,
then it's a simple matter to keep the Federal I.D. numbers written
on the filed invoices.

Of course, it makes sense for small businesses to handle it this
way. Unfortunately, the IRS requires much more complex ways to do
everything. To collect TIN’s (taxpayer identification number), you
will need to have the various companies (or individuals) complete an
IRS form W-9 and return it to you for your records.
http://www.irs.gov/pub/irs-pdf/fw9.pdf Note the instructions on
certification and warnings on phishing and identity theft. Let’s all
collectively shake our heads at the absurdity of it all.

Jamie

28

According to my accountant, who I asked about this today, this law is
not new. It has been on the books for years. It’s just that nobody
has figured out how to enforce it.

Kathy Johnson
Feathered Gems Jewelry
www.featheredgems.com

29 
After she called me, I called Stuller to verify this odd position,
and they rather unceremoniously told me that The Patriot Act
required them to have that SS number on file.

This is true, any company doing business in the US that buys and or
sells more than $50,000 per year of precious metals or gems must
implement an Anti Money Laundering record keeping policy. As a part
of that policy identifying your customers is required. There are some
exemptions for retailers that do not buy from the public but Stuller
is complying with the Patriot Act in asking for the SSN.

Pressing a bit, I asked if we could make the purchase charging it
to her card. They told me that that would be a third party
transaction and illegal.

This indeed could be construed as an illegal act, you are trying to
get around the patriot act anti-money laundering provisions.

I gave up on them, and now join those who say Stuller is not very
user friendly.

They are business friendly, they are not however in the business of
suppling hobbyist. There are plenty of places to buy a small amounts
of silver that are in the business of suppling smaller purchasers
like beginners and hobbyist.

This is somewhat analogous to calling GM and trying to buy a car
directly from them and then complaining that they are not user
friendly when they will not sell to you.

James Binnion
James Binnion Metal Arts

30 
is that a low estimate of a high estimate...regardless, they're
saying a LOT of money hasn't been properly remitted to the taxman.

So, are you saying that you are perfectly happy to allow the IRS and
the rest of the federal government unlimited access to your personal
residence, vehicles, whereabouts, and conversations at any time, so
that they can prosecute you (or others) in case you (or they) break
the (any) law?

That is the direction these laws are going. Don’t be suprised when
currency (cash) is discontinued altogether, and ALL transactions are
done with government-supervised cards to “prosecute someone found
stealing” from the government. Just think of that money the kid down
the block ‘steals’ from the government when he gets paid in cash to
mow his grandmother’s lawn. That won’t happen without cash.

31 
Under this new law, in addition to issuing 1099s to individuals,
companies are now required to file 1099s for every corporation from
whom they purchase more than $600 worth of goods or services in a
given fiscal year. And each business/individual will receive a 1099
from each business to which you sold over $600 of goods or
services.

Doesn’t this mean then that you will have to know the names and
addresses of EVERY customer? How else would you track whether they
made more than $600 in purchases? On occasion I do sell more than
$600 of goods at one time, but most likely that number is reached
over several sales. I usually do not know the names of my customers
in the retail shop, so how could I track their total sales unless I
gathered that with each and every sale?

Onerous! Simply onerous! Write to your Congressmen.

Susan
Sun Country Gems LLC
http://www.suncountrygems.com

32 
The IRS estimates that the federal government loses more than $300
billion each year in tax revenue on income that goes unreported.
Using 1099s to document millions of transactions that now go
untracked is one way to begin to close the gap.

There has always been some cheating on taxes. As the system becomes
more complicated the cheating as a percentage has gone up. The
purpose of the 1099 is a de-facto deputization of businesses and
individuals into the IRS criminal justice system. The 1099’s up to
this time have done nothing to decrease the cheating. Now with so
many more 1099’s will the cheating decrease? How many new data-
processors will be needed to record all these 1099’s. How many
agents will be needed to pursue questionable 1099’s. I suspect the
goals is to overwhelm the system and then replace it with government
banking only.

Dan C.

33 
is that a low estimate of a high estimate...regardless, they're
saying a LOT of money hasn't been properly remitted to the taxman.
apparently some of the intent, of this firming up of law already
in place... is to catch cheats...the subject line of this thread is
misleading, imho. would anyone, here, not move to prosecute
someone caught stealing from their home, studio or store?

If it were easy to pass a law and catch tax cheats, I’d be in favor
of it too. Instead, I content that it will create nightmares for
honest small (and large) businesses, create thousands and thousands
of new IRS jobs, but collect little of the evaded taxes. Tax cheats
are theives who will find new ways to cheat. One business owner I
know carries a wad of $100 bills in his pocket, and never asks for a
receipt for any of his business transactions. I don’t do business
with him because I don’t approve of this, but I know of many who do
because his price is right. This new 1099 law will encourage tax
cheats to deal in cash, not to pay their taxes.

Jamie King
Retired CPA

34

An excellent argument for a simple tax code. Some members of
congress could do this, but not enough yet, I am afraid.

Dan C.

35

I believe Terrie understates it when she says “I think we are all in
for a rough time.”… however, I won’t climb on the soapbox here.

What I’ve read so far says “businesses” must submit the $600 1099
(Will it be the 1099-600 form???), but what about those of us that
work independently out of our home or as DBAs?.

I like that line about how one of the drafters of this idea crowed
about all the tax breaks they gave small business. I’ll give this to
you and I’ll take this away…

"Here you are, gentlemen, this Ace of Hearts is the winning card.
Watch it closely. "Follow it with your eye as I shuffle. Here it is,
and now here, now here, and now-where? "If you point it out the
first time, you win; but if you miss, you lose. "Here it is, you see;
now watch it again. This Ace of Hearts, gentlemen, is the winning
card. "I take no bets from paupers, cripples or orphan children. The
Ace of Hearts. "It is my regular trade, gentlemen, to move my hands
quicker than your eyes. I always have two chances to your one. The
Ace of Hearts. "If your sight is quick enough, you beat me and I pay;
if not, I beat you and take your money. “The Ace of Hearts; who will
go me twenty? It is very plain and simple, but you can’t always tell.
Here you are, gentlemen; the Ace, and the Ace. Who will go me twenty
dollars?”

Is it any wonder legislators are trusted so little?

Hey, how’d that box get under my feet? My apologies.

Mike DeBurgh, GJG
Alliance, OH

Ps - Caveat emptor is latin for “Let the buyer beware”, but what is
latin for “Let the voter beware.”?

36 
Like you, I suspect that's BS. I would have asked them for the
citation.

Sorry it is not BS or rather at least it is a requirement to
implement an Anti-Money Laundering program that allows the vendor to
show in an audit that they have made appropriate efforts to make
certain that the precious metals and gems are not being used to
launder money. As is usually he case Congress passes a law then the
appropriate executive branch departments promulgate the way the laws
are going to be interpreted. The Justice department and IRS have
defined what the vendors must do. As a vendor you are required to
create an Anti-Money Laundering program that tracks your customers
purchases and sales. It is a perfect example of the BS that the last
administration and congress foisted on us to “Fight Terrorism” Go to
the JVC website to get some idea about the laws requirements

If you are in the business of selling or buying precious metals and
gems and have more than $50,000 a year of gross transactions you
need to understand this law and its requirements as you can be
audited by the IRS for compliance.

James Binnion
James Binnion Metal Arts

37 
This is true, any company doing business in the US that buys and
or sells more than $50,000 per year of precious metals or gems must
implement an Anti Money Laundering record keeping policy. As a
part of that policy identifying your customers is required. There
are some exemptions for retailers that do not buy from the public
but Stuller is complying with the Patriot Act in asking for the
SSN.

Yes, the law says companies like Stuller must “implement an Anti
Money Laundering record keeping policy” but it doesn’t say Stuller’s
customers must give up their Social Security numbers to be able to
buy from Stuller. Nor does it say Stuller must collect SS#'s.

http://www.dhfco.com/uploads/Patriot%20Act%20Info%20Sheet.pdf

38 
Let's all collectively shake our heads at the absurdity of it all.

Yes this is truly a huge mess, lets hope the efforts that are
already under way to repeal or rewrite this are successful.

James Binnion
James Binnion Metal Arts

39 
As a part of that policy identifying your customers is required.
There are some exemptions for retailers that do not buy from the
public but Stuller is complying with the Patriot Act in asking for
the SSN.

SSN is not identification. I suspect the real reason Stuller wants
the SSN (or EID) is that they run a credit check.

Can you point out the parts of the Patriot Act that make this
requirement? If not, it may be in some of the rules and regulations
it requires to be developed. I don’t know how to chase those.

BTW, the link I gave before for the Patriot Act text timed out after
30 minutes. Here’s how to find it:
http://thomas.loc.gov/cgi-bin/query/z?c107:H.R.3162: gets you to the
official version page for the bill (HR3162). Under version 4, click
on the [H.R.3162.ENR] link for plain text, or [PDF] for the PDF
version.

You’ll find the text in many places with a Google search, but most
of them have an axe to grind, so it’s best to go to the source.

Al Balmer
Sun City, AZ

40 
I suspect the goals is to overwhelm the system and then replace it
with government banking only.

I love conspiracy theories, especially with tea.

Richard Hart G.G.
Denver, Co.