Republic Monetary Exchange Putting Some Precious Metals Buyers at Risk, Says IRA Document Preparer
Tim Schubert of Blue Diamond Documents says he's helped people prepare Individual Retirement Accounts, (a.k.a. IRAs) for about 16 years. He's a specialist in self-directed IRAs, which allow people to keep money tax-free and still be in control of the assets and where to invest.
Republic Monetary at 40th Street and Camelback Road helps people invest in gold and other precious metals that would be held in a tax-free IRA account.
Trouble is, Schubert says, Republic's doing it wrong.
|Tim Schubert of Blue Diamond Documents says Republic Monetary Exchange stopped sending him business after he told a customer the truth about putting collectible coins in an IRA.|
The Internal Revenue Service prohibits almost all collectible items, including most collectible (also known as numismatic) coins, in IRA accounts.
A 2011 article on Investopedia explains which coins are okay and which are not:
"In order to be allowed to be held inside an IRA, coins must be very pure in their mineral content and not seen as a collector's coin," the article says. "Krugerrands and the old Double Eagle gold coins are disallowed because they do not meet this standard."
The article states which coins are okay for IRA accounts:
American Eagle coins (proof and non-proof)
American Gold Buffalo coins (non-proof)
American Silver Eagle (proof and non-proof)
Austrian Gold Philharmonics coins
Canadian Maple Leaf coins
Another article lists the type of coins not allowed in IRAs. Here's a partial sample:
Rare or collectible coins, including certified or "graded" coins
South African Krugerrand
Swiss 20 Franc
French 20 Franc
Belgian 20 Franc
Schubert says Republic has been helping people put the wrong kinds of coins in customers' IRA accounts.
The reason a gold company might want to do that, as our article this week explains, is because the markup on collectible coins is much higher than on gold or silver bullion.
An ex-employee of Republic Monetary tells New Times he's considering filing a federal whistle-blower suit over the practice.
"We were told there is an opinion from a tax attorney" that Republic's IRA scheme was legal, the former employee says. He later found out there was no such letter.
When New Times asked Republic Monetary for any of kind of legal analysis or comment about the how the precious-metals IRA accounts were being handled properly, the company's lawyer said he'd get back to us. But the company still hasn't responded to that question.
The government's IRA program started back in the '70s. It's similar to a 401K in that it lets people invest money for retirement without being taxed on it. With gold more than doubling in price from 2008 to now, many IRA holders have decided to take a chunk of their tax-free money and invest in precious metals.
Republic Monetary helps customers set up a limited-liability corporation through an IRA custodian company, Sunwest Trust. The LLC then gets a check representing the money in the IRA and the LLC manager, the IRA account holder, writes checks for gold or other investments.