What about this from f90221 that must be filed with the IRS? Is this acurate?

From another client:

"Yes. I use it, but it was just brought to my attention that it fits the definition of a "foreign account" as defined by the IRS. Therefore one is required to file by June 30 each year an IRS form f90221 reporting foreign accounts containing as much as $10,000 at any time during the past year. I was unaware of this and find it a negative. I inquired about it to customer service at GoldMoney and to James Turk, the founder of the enterprise. Neither viewed it as a "foreign account." Then I called the phone number associated with that form at the IRS and was told to file the form for all years. The penalty for failure to file is a fine of up to $250,000 and a prison sentence of up to 10 years for each year of failure to file. I am disappointed that this liability to US taxpayers was not presented up front by the management of the enterprise."

Source: http://www.peakprosperity.com/forum/anyone-tried-goldmoneycom/20526

Comments

  • SpartanSoulSpartanSoul Posts: 16 Tin ✭
    If you are talking bout FBAR then what about this....

    https://irs.gov/businesses/corporations/basic-questions-and-answers-on-form-8938#CashQ4



    Q4. I directly hold precious metals for investment, such as gold, in a foreign country. Do I need to report these assets on Form 8938?
    No. Directly held precious metals, such as gold, are not specified foreign financial assets. Note, however, that gold certificates issued by a foreign person may be a specified foreign financial asset that you would have to report on Form 8938, if the total value of all your specified foreign financial assets is greater than the reporting threshold that applies to you.


    So if would depend on if we are "holding directly" buy using Goldmoney. Since the gold is in our name in the vault shouldn't we be free from the requirement to report?

    I'm not a lawyer and it would be wonderful to have a professional opinion to lay this issue to rest once and for all.
  • MajesMajes Posts: 41 Copper ✭✭
    Might as well put the response to this post from James Mitchell as well.....

    ---------------------



    Hello to everyone who wishes to purchase precious metals.

    I am actually the customer support manager at goldmoney.com and I have read some of your blogs in regard to owning a GoldMoney Holding.

    I note there are several queries which need addressing.

    First query is tax reporting and in the US. As you are aware, this subject is extremely difficult to answer as the US tax rules are not easy to follow. GoldMoney cannot give tax advice as you have probably been told already. However, I can show you a response from our Founder James Turk who responded independently which maybe of help.

    Message from James Turk:

    "Dear .............

    In regards to reporting requirements, customers do not have an "account" at GoldMoney. They have a "Holding", which is clearly noted in our User Agreement.

    http://goldmoney.com/user-agreement.html

    This distinction between an account and a Holding is important, and
    ............ (customer's name) alludes to the difference when he distinguishes between share
    certificates in an account compared to physical share certificates you
    own. Our customers own physical metal, a tangible asset that
    comprises bars clearly identified and numbered, which are regularly
    audited. Tangible assets are different from financial assets, i.e.,bank deposits.

    As for the reporting requirements, I cannot give tax advice because
    that is not my area of expertise. I will only note .......... point that
    there is much uncertainty surrounding it. But the regulation does
    seem aimed at reporting financial assets, and not tangible assets,
    which seems to be the point (customer) is making."

    As you will note, James Turk alludes that it may not be reportable but every individual no matter where they reside should seek tax advice in their home jurisdiction. I would be interested to hear if anyone has indeed seeked tax advice and what was the advice they were given?

    Therefore, in my opinion it is disappointing that the US authorities do not make this important point clear.

    Another query that regularly comes up is confiscation. GoldMoney has positioned itself to offer the best possible protection under current international law.

    GoldMoney is not a US company, and therefore do not fall under US jurisdiction. GoldMoney is based in Jersey, Channel Islands, we operate under the laws and regulations as stipulated there. Though it is small and relatively unknown, Jersey is an 800+ year old sovereign country and has become a major financial center because it relies upon Anglo-Saxon common law, which puts property rights at the forefront. See our Privacy Policy:

    http://goldmoney.com/en/privacy-policy.html

    Secondly, because our administrative offices are located in Jersey, the vault operators are not given access to any of our customer records.

    Our customers can store their metal in London or Zurich or split their holdings and put it in both vaults. Neither the UK nor Switzerland have a history of confiscating assets. While circumstances can of course change, this established track record in these countries gives comfort. We intend to add more vault locations in the future, giving our customers further opportunity to diversify their metal in yet more countries.

    In our view, the risk of confiscation is higher in certain countries. For example, the US has confiscated gold once before, so the risk of confiscation would be considered much higher in the US than Canada, for example, which has never confiscated gold. Similarly, gold has never been confiscated in Switzerland. Gold was confiscated once before in England, by Charles II in the 17th century. Given that it was so long ago and before the Glorious Revolution of 1688 and what has since evolved into a constitutional monarchy, the risk of confiscation in England is small, but probably somewhat greater than, say, Switzerland, where gold has never been confiscated.

    The point of this analysis is that Switzerland is probably a safer place to store gold, but also, there is no way of avoiding the risk of government.

    Because gold confiscation is a theoretical "what if" question at the moment, it is impossible to confirm how a confiscation order would play out in the future. There is some certainty about how it would play out today though, which is basically, your rights are protected under Jersey law. It seems unlikely that in the future Jersey would cave-in to maintaining this basic rule of law, but obviously we cannot guarantee that outcome.

    There is no concept of asset seizure in Jersey, as there now is in the States. Also, due process is still a basic right in Jersey, meaning that everyone is entitled to their day in court in order to defend any allegations made against them. This right applies, as I understand it, to anyone with a business relationship with a Jersey company, so GoldMoney's customers do have access to the Jersey courts for this reason. Again, I would hope that this basic principle of law will not be undermined in Jersey in the future.

    I think the most important point is that, first, GoldMoney is dedicated to serving its customers and meeting their needs. Thus, we are always acting within our customers' best interests. If Jersey law were to change in the future so that we were no longer able to operate under a reliable rule of law that protects property, then it is certain that GoldMoney would consider other options, such as locating to where the rule of law and property rights were still respected.

    In terms of some 'big picture' guidance, there are pros and cons to every alternative with regard to gold/silver storage. The decision that everyone needs to make is to how best serve your own needs, given these different alternatives.

    For example, burying gold in your backyard is one alternative form of gold storage, but it comes with risks as well as advantages. Similarly, GoldMoney had advantages, and importantly, we aim to mitigate any risks (for example, with the audits completed by our auditor, having the metal insured, operating in a country with a reliable rule of law, etc). We therefore believe that GoldMoney can provide a useful service and play an important part in everyone's investment strategy.

    In regards to insurance, all the gold, silver and platinum stored in the vaults in London and Zurich are insured against commercial risks. They are not, however, insured from acts of government, including war, nuclear attack, civil strife, confiscation and the like. We researched insurance against government confiscation with the insurance industry when launching GoldMoney and learned that insurance against government risks was not obtainable from any insurance company. However, we believe we have done everything we possibly can for our customers to protect their assets against such events.

    I personally believe governments will contact their citizens rather than international companies because they have no jurisdiction over offshore companies. Therefore, I believe it is important individuals adhere to their own tax laws for best practice.

    In the 1930's, US citizens who held their gold outside the US were safe from handing their gold to the government because the gold was held outside the US governments jurisdiction. The citizens who held their gold in the US were not so fortunate. So it is an important distinction from owning gold in your home country (back of your garden) and storing your gold offshore.

    No one can predict what governments may or may not do in the future and we can only speculate. However, we have gone to great lengths to safeguard our customer assets under current international law.

    I hope the above helps and look forward to any feedback.

    All the best!

    James Mitchell
    Senior Relationship Manger
    GoldMoney
  • 79Au19779Au197 Posts: 4,047 Gold ✭✭✭✭✭
    @Wackadoodle @Majes @SpartanSoul @GoldMatters @SpontaneousOrder

    Ah yes, the issue of US tax compliance. We have had quite the discussions about this in the past. US Tax law is such a tricky beast and I am neither an account, lawyer, nor tax expert. Sadly no one ever said that establishing your own personal gold standard would be easy when it comes to Uncle Sam. Thankfully for much of the rest of the world the tax consequences are not as onerous as those of the US. In its attempt to provide a new global gold standard this is good for Goldmoney the company, but for US citizens … as they say "ignorance of the law is no excuse".

    I suggest that you review the two threads below, but focus on the latter of the two. @SpontaneousOrder convinced me that whatever the Goldmoney Terms of Service say about it being a Bailment agent under Canadian law, that the IRS still considers it to be a foreign account requiring FBAR registration if the total of all funds in Goldmoney and any other account exceed $10,000. Uncle Sam makes the law and always interprets it in its favor. Also keep in mind that all sales (redemptions) of gold (loading your Goldmoney card, physical redemption, transfer to bank, etc.) are likely to be potentially taxable events on any capital gains accrued between the purchase and the sale of your gold.

    http://community.goldmoney.com/discussion/786/us-tax-and-reporting-of-gold-bailment

    http://community.goldmoney.com/discussion/793/us-tax-requirements-for-bitgold-personal-opinion

    Bottom line - consult your tax advisor. o:)

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