- The most costly traps are hidden markups and high-premium collectible coins pushed into IRAs.
- “Home storage” Gold IRAs can trigger taxes and penalties; a 2021 U.S. Tax Court case ruled against one.
- Legitimate companies put every fee and the markup in writing before you buy.
- If you feel pressured, rushed or confused, walk away.
1. Hidden Markups on “Special” Coins
The biggest risk is not the price of gold. It is how much you pay above the price of gold. Some sellers steer IRA buyers into proprietary, “limited” or proof coins carrying markups far above standard bullion. In 2020, the CFTC and 30 state regulators sued a precious metals dealer accused of taking about $185 million from mostly elderly investors largely through excessive markups.
2. “Home Storage” Gold IRAs
Some promoters claim you can keep IRA gold in your home safe through an LLC structure. In McNulty v. Commissioner (2021), the U.S. Tax Court ruled that IRA owners who took physical possession of their IRA’s coins had received taxable distributions, and upheld penalties. IRA metals belong with an approved trustee or depository. Here is how storage should work.
3. Pressure and Scare Tactics
Urgency is real: debt, inflation and bank risk are serious issues. But a legitimate company will give you time to read the paperwork, talk to your spouse and check with your tax professional. “This price is only good for the next hour” on a retirement decision is a red flag.
4. Vague or Hidden Fees
A Gold IRA has real costs: account setup, annual custodian fees, storage and insurance, and the dealer spread. None of those are a problem if they are disclosed. They are a problem when you discover them on your first statement. Get every fee in writing before you sign.
5. “Free Silver” That Is Not Free
Promotions offering free silver are common. Sometimes they are a genuine bonus. Sometimes the cost is built into a higher markup on everything else. Compare the total price you pay per ounce, with and without the promotion.
6. Non-Eligible Products in Your IRA
IRA gold must generally be .995 fine (the American Gold Eagle is a permitted exception), silver .999, and platinum and palladium .9995. Rare and most numismatic coins are not allowed. A company putting ineligible items in your IRA exposes you to tax problems. See which metals qualify.
7. No Clear Buyback Policy
Buying is easy; selling is where you find out who you are dealing with. Ask how the company buys back metal, how the price is set, and how quickly you are paid.
Your 10-Question Protection Checklist
- Is the company BBB-accredited, and what is its rating?
- What are all the fees, in writing?
- What is the markup over spot on each product?
- Is every product IRA-eligible bullion?
- Who is the custodian?
- Which depository holds my metals, and is it insured?
- Will I get statements directly from the custodian?
- What is the buyback policy and pricing?
- Can I take time to review before committing?
- Will you put the price lock and trade confirmation in writing?
At Bishop Gold Group, we welcome every one of these questions. Call (833) 589-8100 and ask us.
Sources: CFTC customer advisories; U.S. Tax Court, McNulty v. Commissioner, 157 T.C. No. 10 (2021).
