[Atlanta, Georgia, March 26, 2024] – The National Coin & Bullion Association (NCBA) has received clarification from the Internal Revenue Service (IRS) as to which items need to be reported on IRS Form 1099-B. In December 2023, NCBA initiated discussions with the IRS to seek clarification on reporting requirements for dealers in precious metals. This effort was spearheaded by Gary Knaus, NCBA member and owner of Knaus & Associates, Inc., alongside NCBA general counsel Jimmy Hayes, who played a pivotal role in engaging with the IRS Office of Chief Counsel.
The inquiry stemmed from discrepancies observed in the application of IRS Revenue Procedure 92-103, particularly concerning the compliance of specific precious-metal coins and $1,000 face-value bags of 90% silver with Commodity Futures Trading Commission (CFTC)–approved regulated futures contracts.
Following an extensive investigation, NCBA determined that current CFTC-approved regulated futures contracts for precious metals predominantly mandate delivery in bar form from approved brands, adhering to specific purity standards. Consequently, precious-metal coins and $1,000 face-value bags of 90% silver no longer fall within the scope of reportable items under these contracts, contrary to prior practice.
Through multiple exchanges with the IRS Office of Chief Counsel, including meetings and emails, an attorney with the IRS confirmed that these items are not reportable under current CFTC-approved contract requirements. This informal ruling will be reflected in updated Instructions for IRS Form 1099-B, Sales of precious metals.
However, it was underscored that any future changes to CFTC-approved contract requirements could potentially impact this status. NCBA will continue vigilantly monitoring any developments in CFTC regulations that may affect reporting requirements.
NCBA executive director David Crenshaw expressed his satisfaction with the outcome, stating, “We are pleased to have clarification from the IRS regarding reporting requirements for dealers in precious metals. This change underscores the importance of proactive engagement with regulatory authorities to ensure compliance within the industry.” By seeking clarification and actively engaging with regulatory authorities, NCBA reaffirms its commitment to upholding compliance standards and ensuring its members remain informed while navigating the complexities of reporting requirements in the precious-metals market.
In light of this clarification, the NCBA concludes that only approved brands of precious metals in specified ounces and purity are to be reported. Acknowledging the dynamic nature of approved brands, the association has withdrawn its “Items To Be Reported” resource and temporarily discontinued its Broker Reporting Information Kit, pending updates.
To aid dealer-members in understanding reportable items, the NCBA is releasing a new white paper with insights into approved brands acceptable for fulfilling precious-metals contracts. It’s important to note that this information is intended to supplement professional advice from tax or legal advisors.
Source link