Coins – US Mint Silver Proof Sets – NOT!

In recent years, the US Mint packaged silver proof sets in red and white boxes. The boxes contain the same design as the regular proof sets, regular meaning proof versions of circulating coins, only the designs are red instead of blue.

This picture shows the packaging for the 2003 through 2006 US Mint’s silver proof sets. Each set contains either 10 or 11 coins. (You can view the coins each set contains via our regular proof set pages: 2003 Proof Set, 2004 Proof Set, 2005 Proof Set and 2006 Proof Set.)

US Mint Proof Sets Red but Not Silver 2003 through 2006

Only there is a slight problem with each of these “silver” proof sets.

You see, each one of these proof sets should contain $1.85 in silver coins – a dime, five quarters and a half dollar.

But, these sets don’t have any silver in them.

Instead, the sets contain the coins that would be in a regular, cupro-nickel clad proof set.

In this next picture, the packaging shows what the two 2003 proof sets should look like. In both sets, the proof coins are the same – no silver exists in the red packaged coin set.

2003 US Mint Proof Sets

These pseudo-silver proof sets were purchased from another coin dealer. But from whom and how long ago, we don’t know.

Dishonesty makes you wonder, though.

Who was dishonest? Was it a coin dealer whom we trust? Or, did that coin dealer buy the proof sets from another coin dealer who was dishonest?

Or, was it an individual who swapped the coins from one set of packages into another before selling it to a coin dealer? Why didn’t that coin dealer catch the error?

Since we found only one of each year’s proof set from 2003 through 2006, it makes you think it was an individual who did the swapping.

On the other hand, it could have been a dealer who took a chance that they could get by with one of each, and if caught, could plead ignorance to the error.

And, who knows, there may be other years of pseudo-silver proof sets sitting on the shelf that were part of this same hoodwinking effort.

For grins, let’s take a quick look at the difference in value just by looking at the current silver rates. With today’s silver prices, silver coins are running at roughly $24 times face value. For easy calculations and to allow for market fluctuations, let’s just use $20 as the multiplier.

The four sets, each supposed to have $1.85 in silver coins, should contain roughly $150 in silver. Since the sets do not contain silver and since the regular proof sets are currently low-demand and low-value, those proof clad coins are worth only a small fraction of the estimated silver value. This also means they’re worth only a small fraction of what was paid for them.

Someone, somewhere, double dipped. They sold the pseudo-silver proof sets with their cupro-nickel proof coins and obtained payment based on silver proof set prices. Then, they sold the real silver coins for their silver content.

When a coin dealer is busy at a coin show and is buying from coin dealers he trusts, he doesn’t always get an opportunity to review the contents of every set he buys.

But, for you, this is a lesson.

If you are buying silver proof sets or mint sets, make sure the contents – in addition to the packaging – include the appropriate silver coins.

Of course, the cupro-nickel clad coins would be easy to discern from their metal sandwich viewed on the coins’ edges. The difficulty is that you cannot see the edges of the coins in their proof set packaging to be absolutely sure they are silver.

Though, if you compare a true silver proof set to a cupro-nickel proof set, you can see the differences in the colors of the metals on the faces of the coins.

Yes, sometimes the silver coins will tone to a yellowish shade, but by tilting the set back and forth under a good light, you can still see the lighter, whiter colors of the silver.

In contrast, the cupro-nickel proof coins will have a pinkish-orange color consistent across the coins’ designs.

When you review the silver proof set’s silver coins, look at both sides of the coins. Sometimes it is easier to determine the metal on the obverse images, sometimes on the reverse.

As for these four not-silver proof sets, was the dishonest action done by a person so desperate for money they resorted to theft? And, it was theft.

Or, was it done by a person who subscribes to the belief that because someone else has more than they do that it’s justifiable to take from them? “Let’s stick it to the man?”

Or, did a career criminal do the coin swap?

Whoever did it and for whatever reason, they may receive a short term reward for their dishonesty, but they will also pay for their theft at some point in their lives.

For you who are interested in purchasing silver proof sets, learn from this. Make sure the coins that should be silver are silver before you buy.

Bullion – Real or Fake?

August 24, 2011 · Posted in Coin Collecting Tips, Coin Fraud Tips, Technology · Comment 

This post is somewhat Negative Nellie, but its intent is to educate.

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This could be real, but in all likelihood, it’s like someone trying to sell oceanfront property in Oklahoma — a scam.

Dear Sir or Madame,

I have just visited your website, I decide to make an request order directly from you.

Could you assist and supply me for my request :

Bullion gold coin like :

-. 1 Oz Mapple Leaf
-. 1 Oz China Pandas
- .1 Oz Philaharmonic
-. 1 Oz Buffalo
-. 1 Oz Double Eagle 

I need your information regarding your business policy :

Do you accept credit card as payment ?

And Please calculate price and cost shipping to my address in Los Angeles, CA 90061 by Air freight (UPS, or FedEx ).I will pay my order with my credit card account. If this is best deal I will send my privat info via email.Please reply ASAP and let me know the best price for this stuff.

Looking forward to hearing from you.Thank you

The email address “appears” to be a legitimate corporate address. He also included the corporate business following his name in closing the message.

Unfortunately, the request has a 99.9999% chance of being fraudulent.

Many stories exist throughout the coin community about a variety of scams, and there are so many ways this type of message could result in a nightmare. Here are just a few examples.

This one could be someone wanting to buy the products with a stolen credit card. One ploy with stolen cards is to have the product shipped to a hotel address or to an overseas address.

Another ploy of the scammers is to have a legitimate credit card, receive and sign for the package, then file a complaint with the credit card company that the goods were never received. When the dealer provides the signed package receipt, they claim it’s not their signature.

It could even be a way to obtain personal/business information in order to perpetuate a different type of fraud.

Or, it could be a way through further emails to infect a computer with a virus, a trojan or some other type of application to obtain information they could use to their benefit and to the receiver’s detriment.

This is no longer our grandparents’ world where a person’s word and a handshake meant something.

Especially with the ease of hiding behind technology, it’s easier for criminals to take advantage of the susceptible or the unsuspecting.

It’s sad to have to worry about scams and frauds.

Take heed when you receive messages even remotely similar to the one above.

There’s a small — very, very small — chance the email is valid. But, the gamble is not worth it.

The above message won’t receive a response.

Do you know – 2011 American Eagle Bullion Coins?

Remember the Chrysler commercials from years ago with Ricardo Montalban saying, “Co-rin-thi-an leather?” Come to find out, Corinthian leather was nothing more than a marketing ploy that sounded rich when said with Mr. Montalban’s accent.

This story is reminiscent of Corinthian leather if you think about it.

So, you’re thinking, “What does leather have to do with coins?”

In a recent press release (May 26, 2011), the US Mint announced they would augment their production of the American Eagle Silver Bullion coins by utilizing the San Francisco mint facilities. With so much demand for the silver bullion eagles, the West Point mint needed help addressing the market’s requirement.

Historically, people desired coins with the San Francisco mint mark more, sometimes much more, than the same coin produced at the other mint locations.

But, in this case, the 2011 American Eagle Silver Bullion coins will not have a mint mark whether they are produced in San Francisco or in their normal mint facility, West Point.

“So, where does the Corinthian leather come into this story?”

Well, the leather doesn’t, but the possibility of a somewhat similar marketing ploy is being introduced.

One of the coin grading services offers to certify the San Francisco produced silver eagles and place them in special holders that signify the coins were minted in San Francisco. To do this, they require the silver bullion coins to be in their original sealed box from the San Francisco mint. Since silver bullion coins are sold to dealers in bulk quantities, the dealers can ship the San Francisco boxes directly to the coin grading service for this special certification.

The labels on the coin holders for these certified American Eagle silver bullion coins will state, “Struck at the San Francisco Mint” and will include an “S” in parentheses after the year [2011(S)]. But remember, no “S” mint mark exists on the coin.

Other than as a marketing gambit, is the San Francisco minted American Eagle silver bullion coin worth any more than the West Point minted coin?

To some, maybe…

But, here’s a problem. Each year, many American Eagle silver bullion coins are purchased as investment coins, for example, for IRAs. Certain investment vehicles require the coins to be in their original mint packaging including the capsule, the clam shell, the outer box and the certificate of authenticity. In fact, these programs will not accept the investment bullion coins in a “certified” form.

Now, of course, if a collector wants a certified American Eagle silver bullion coin with a particular grade and with the San Francisco mint designation on the label, that’s certainly their prerogative.

But, if a purchaser is looking at investment value and the sale of the bullion coins at some future date, purchasing the bullion coins in US Mint original packaging can save money – no need to pay extra for certification. When ready to sell, some people will pay more for certified eagles, but the broader market exists for uncertified American Eagle coins in their original mint packaging.

More from Welcome to Coin Collecting!

June 22, 2011 · Posted in Coin Collecting Tips, Coins, Mint · Comment 

Yesterday, we introduced a “found treasure” in the form of a Welcome to Coin Collecting booklet from 1966. For the most part, its details still hold true today. But, there are some pieces of information that, though correct, are not used that frequently. Other pieces are correct, but not correct for every coin.

For example, lets take a look at two coin diagrams, one of the obverse and one of the reverse, showing various coin terms pointing to parts of the coin.

First, the coin’s obverse diagram:

Welcome to Coin Collecting booklet obverse terminology

Next is the coin’s reverse view:

Welcome to Coin Collecting booklet reverse terminology

It’s interesting to note that the US Mint has similar views on their web site showing the anatomy of a coin including terminology for the obverse and reverse of a coin. But, neither their Anatomy of a Coin page nor their glossary of coin terms include all of the terms in the diagrams above.

For example, the US Mint does not define truncation.  In the latest Guide Book of United States Coins 2012, truncation is defined as the sharply cut-off bottom edge of a bust or portrait.

It’s not often you hear truncation used in discussing coins – it’s correct, just not that often used by coin collectors.

Similarly, how many times do you hear the word exergue when discussing coins? The US Mint does not show and does not define that term either.

Turning again to the Guide Book of United States Coins 2012, exergue is that portion of a coin beneath the main design, often separated from it by a line, and typically bearing the date.

Using that definition, not all of our coins will have an exergue area with the date since several contain the date to the side of the main design.

As another difference in the diagrams above, today’s mint marks can be found in different locations.

Our most common circulating coins – the penny, nickel, dime, quarter and even half dollar – have the mint mark on the obverse (front) of the coin. On the other hand, our modern commemorative coins have the mint mark on either the obverse or reverse of the coin.

But, a few years ago, the US Mint introduced the presidential dollar coins with the mint mark moved into the edge lettering. This same mint mark location was chosen for the new Native American golden dollar coins as well.

Basically, the little booklet still has a lot of good information, it’s just not comprehensive enough to include all the options. Then, again, the booklet is less than 20 pages, total.

It’s interesting, though, that the US Mint’s coin collecting pages are brief in their descriptions.

That’s OK. There are plenty of other coin collecting resources – people, books, clubs, shows – to help individuals with the hobby of numismatics.

Found Items – “Welcome to Coin Collecting”

June 21, 2011 · Posted in Coin Collecting Fun, Coin Collecting Tips, History · Comment 

It’s interesting what can be found in a collector’s world.  Take a look at this little booklet titled, “Welcome to Coin Collecting!”

Welcome to Coin Collecting front cover

First, take a look in the upper right corner. This little gem was 15 cents way back when.

Inside the front cover, images of a few coins form an arc over the copyright details.

Welcome to Coin Collecting copyright page

But, since that’s too small to read, let’s take a closer look:

Welcome to Coin Collecting copyright

Remembering our Roman Numerals, this copyright is 1966. [ 1000 (M) + 900 (CM) + 50 (L) + 10 (X) + 5 (V)  + 1 (I) = 1966] Using the Bureau of Labor Statistics calculator, 15 cents in 1966 would be $1.05 in today’s market.

At 15 cents (or $1.05 today) this little booklet was less than 20 pages and provided a lot of information to tease a youngster’s interest in the hobby of coin collecting. Claiming coin collecting is the world’s oldest hobby helped intrigue parents and grandparents alike. This little booklet could also have grabbed the interest of adults who wanted to explore the highlights of numismatics. 

You’ll note the copyright belongs to Whitman Publishing. It’s fitting that the back of the small booklet contained a list of books to help the beginning collector learn more.

Welcome to Coin Collecting recommended books

Taking a closer look, this back page includes:

Enjoy your hobby to the fullest. Learn about your coins through these top six of the world’s most popular books on coin collecting.

“Let’s Collect Coins,” by Ken Bressett.  An introduction to the hobby.  Answers all of the beginner’s questions and has a price guide to all valuable United States coins.  64 pages . . . . . $0.50

“Handbook of United States Coins,” by R. S. Yeoman. The most practical price catalog for new collectors. Shows prices paid by dealers for U. S. copper, nickel, silver and gold coins. Includes information on mint records, mint marks, how to buy and sell.    128 pages . . . . . $1.00

“A Guide Book of United States Coins,” by R. S. Yeoman. The standard retail price guide for all U. S. coins. Contains information on proof coins, commemoratives, Colonial and Territorial issues.  256 pages . . . . . $1.75

“A Guide to the Grading of United States Coins,” by Martin Brown and John Dunn. Tells how to determine the various conditions of U. S. coins. Detailed line drawings show condition grades for every type from 1793 to date.   208 pages . . . . . $1.75

“United States Commemorative Coinage,” by Arlie R. Salbaugh. Covers each issue of U. S. commemorative coins. Includes stories of events, quantities minted, designers’ names and facts about original issue practices.  144 pages . . . . . $1.75

“Catalog of Modern World Coins,” by R. S. Yeoman. The standard reference guide to coins of all countries. Lists and prices each coin from approximately 1850 to the present. Contains information about dates, mints, metallic content and denominations.   510 pages . . . . . $4.00

Perhaps to underscore the longevity of the hobby, these books are still available today in updated formats, though two of them are currently on Amazon as used only.

One is quite familiar as the Redbook (Guide Book of United States Coins), and another is known as the Blue Book (Handbook of United States Coins).

Interestingly, the books have gotten larger and more elaborate over the years as they have been updated, but the prices, adjusted for inflation, haven’t really increased that much. The above prices of $0.50, $1.00, $1.75 and $4.00 would be $3.49, $6.97, $12.20 and $27.90 today.  In fact, the latest Redbook is available on Amazon for less than $12.00.

This fun little booklet find is not pristine, but it certainly survived its 45 years with most of its information still valid.

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See Amazon for updated versions of these books:

Remembrance Medallions

May 25, 2011 · Posted in Coin Collecting Tips, Coin Values, Medals · Comment 

This year, 2011, marks the ten year anniversary of the tragedies caused by terrorism on September 11, 2001. Anniversaries provide opportunities to remember, and many different symbols can be purchased to help our efforts to not forget.

In looking around the US Mint web site, they recently published a caution about 10-year anniversary coins. For the ten year anniversary, a private mint offers a “commemorative anniversary dollar” that is a “Liberian government authorized legal tender coin.”

The cautionary article provides a reminder history lesson that Congress has the exclusive power to mint US coinage, and they delegate that power to the US Mint. In other words, the US Mint is the only authorized mint for US coinage.

The private mint is not illegally claiming their commemorative coin is a US coin, but the US Mint is concerned that people eager to take part in the tenth anniversary may mistakenly believe the coin is an official US Mint product.

Basically, it’s a legal marketing ploy by the private mint that skips along the boundary of ethics with their semantics.

On the other hand, the design of the private mint’s commemorative “dollar” is interesting.  If you like and can afford the “coin,” then buy it and enjoy it. But, don’t buy it for an expected increase in numismatic value.

Most collectors of American coinage are purists and want only US Mint coins and collectibles.

This private mint collectible might, a long shot, increase in value, but another difficulty would be finding a like-minded collector who would pay a premium.

Here’s an example of a remembrance medallion made just after the 9-11 attacks.

A small red box with a sticker on the front showing the flag and “Made in USA” holds the medallion.

9-11-2001 Official Freedom Medallion outer box with flag on cover
Opened, a piece of blue velvet flocked cardboard holds the medallion in its protective plastic over a square of foam padding.

9-11-2001 Official Freedom Medallion box opened showing contents

The obverse of the medallion shows the twin towers still standing with a flag proudly waving behind them. Below the towers on the blue water, the date “09-11-01″ shows in red. Around the outer edge, the inscription states, “We salute our brave Americans” and “A date we dare not forget.”

9-11-2001 Official Freedom Medallion obverse image

On the opposite side of the remembrance medallion, the inscription shows a large “911″ and along the outer ring, “Official Freedom Medallion” is across the top and “United States of America” is around the bottom.

9-11-2001 Official Freedom Medallion reverse image

Under the large “911,” a quote pulled from President John F. Kennedy’s inaugural address is noted. After being sworn into office, he stated in this portion of his inaugural address,

“Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of liberty.

“This much we pledge–and more.”

The small medallion could not quite contain all of this particular point of his address, but his main message about the defense of liberty clearly shows on the reverse inscription.

This remembrance token is a beautiful and colorful symbol to help us remember 9-11-2001.

But, purchased as part of a coin collection, the medallion shown above added very little, if any, value to the price of all of the coins. Since it is not a coin and since it is not silver, its numismatic value was negligible.

Collect remembrance medallions for their beauty and their purpose, not for any numismatic value. Though doubtful, it may increase in value over time as a medal, but it won’t have value in the numismatic market.

2000 Proof Set Error

But, this error is not a US Mint error.

This post could also be titled, “How to make an otherwise laid-back coin dealer angry.”

At a recent 3-day coin show, several deals of large quantities of proof sets and mint sets were purchased. In most cases, these groups of sets were purchased from other dealers.

Now, when you’re busy, it’s just not feasible to open every box to verify the contents of every set or to look at every coin in each set. Plus, when you’re buying from other dealers, whom you know, you don’t feel the need to check every set.

In this case, someone pulled a fast one. Was it a dealer? Or did someone pull a fast one on another dealer who did not realize they had been had before selling the sets?

Let’s look at the lens for the non-quarter coins in the 2000 proof set:

2000 Proof Set with 1999 insert and number of coins

The lens looks nice. The insert holding the coins inside the lens looks good – it has the blue-toned flag waving in the background and the Treasury Department seal on the front.

So, what’s wrong?

Let’s take a closer look at the coin specifications for this portion of the 2000 proof set:

2000 Proof Set Coin Specifications

Though the text may be difficult to see, take a look at the number of columns. There are five coins listed in the coin specifications with the one on the far right being the 2000 Sacagawea golden dollar.

But, take a look at the lens holding the coins again:

2000 Proof Set Missing Dollar Coin

No dollar in this set.

How can this be?

Well, it’s really easy if you have the piece parts.

Remember, the 1999 proof set’s package used basically the same design as the 2000 proof set, but the 1999 proof set did not include a golden dollar.

Someone opened the 2000 lens and removed the dollar. To make it easier to pull a fast one, they moved the other four coins into a 1999 insert which only had four holes for the coins. The insert was then placed back into the two-part lens which snaps around the insert. The now-four-coin lens was placed back into the 2000 proof set box along with the lens holding the five quarters and the coin specifications card.

Unfortunately, this 2000 proof set “error” was not the only one of its type in the purchases from a couple of months ago. And, unfortunately, the deals have been organized into inventory by year such that the seller of these “error” sets is unknown and cannot be challenged.

The minor good news in this story is the 2000 proof sets were not expensive. On the other hand, with the missing dollar, they’re not exactly worthless, but they’re sure worth a lot less than was paid.

The lesson for you in this story is to make sure you know what the set you are buying should look like and the coins it should contain – how many and what type.

New US Mint Sets in Early January

December 27, 2010 · Posted in Coin Collecting Tips, Coins, US Mint Collectible Sets · Comment 

Today’s message brought to you by: MPI Coin Brand Banner

The US Mint recently sent out messages announcing their new product schedules for the 2011 Silver Proof Set, the 2011 Clad Proof Set and the 2011 Uncirculated Set (a.k.a. 2011 Mint Set).

(Following photo courtesy of the US Mint.)

2011 US Mint Proof Sets and Mint Set

The set on the left is the 2011 Silver Proof Set. The Uncirculated Set in the middle consists of the red package for Denver and the blue package for Philadelphia minted coins. The right set shows the 2011 Clad Proof Set.

The release dates as noted in the announcement dated 12/23/2010 are:

2011 United States Mint Proof Set   –   January 11

2011 United States Mint Silver Proof Set   –   January 25

2011 United States Mint Uncirculated Coin Set   –   February 8

I planned to add a link to the product release schedule and the proof and mint set areas of the US Mint’s web site. Lo and behold they have dramatically changed their web site (www.usmint.gov) and the pertinent pages could not be found – at least not quickly and not via their sitemap.

Their web site’s look is dramatic and interesting, but for one who was familiar with the old site, the new site is also very frustrating.

But, back to the main point…

The new 2011 collectible sets will be available soon. Per the US Mint’s email message, if you begin their online subscription service by January 4, 2011, these will be the first sets you receive.

Or, if you prefer, wait a few weeks and the sets will be available at the coin shows – perhaps not by the January 16th show, but soon.

Today’s message brought to you by: MPI Coin Brand Banner

Caution – Word Games

September 22, 2010 · Posted in Coin Collecting Tips, Coin Values · Comment 

Recently, rumors started that the US Mint would produce proof Eagles in 2010. As of September 8 (see our blog post), product release information about the proof American Eagles did not exist on the Mint’s release schedule. As of today (9/22), they list 2010 American Eagle Gold Proof Coins will be available on 10/7/2010. Silver proof eagles remain TBD (To Be Determined) in their schedule of products.

As for the gold proof eagles, people called the Mint and obtained specific information about the quantities. The quoted limits (subject to change) will be 39,000 for the four coin sets with individual coin option limits at 25,000 for the one ounce, 15,000 for the one-half ounce, 16,000 for the one-quarter ounce and 27,000 for the one-tenth ounce coins.  Release of these limited quantities begins at noon (12:00 pm) Eastern time on October 7, 2010.

Remember, in 2009, the US Mint did not produce any proof silver or gold American Eagles, but they did provide over 28 million (almost 29M) uncirculated Silver Eagle coins.

So, what’s the difference between the Mint’s uncirculated and proof coins?

In 2005, the US Mint began making uncirculated coins with a satin finish using special dies. The smooth, satin finish readily distinguishes the uncirculated coins from circulated – in the case of pocket change. For collectible and investment coins, such as the commemoratives and the American Eagles, the satin finish differs greatly from the proof versions.

On their web site, the US Mint claims, “Today’s proofs are made as carefully as pieces of expensive jewelry.” Proof coins start as a highly polished blank, and on special coining presses, these blanks are struck at least twice with the special proof dies. The coin’s field appears mirror-like while the raised design has a frosted look.

You’re thinking, “OK, OK, I know all this already, what’s your point?”

Well, do you know what “proofed” is?

One of the cable shopping channels just started offering “2009 proofed silver eagles.” Their web site claims they have “taken a collection of original, non-proof US Mint struck 2009 Silver Eagles that had no mint mark, created new dies, and individually over-struck each coin to create the beautiful polished proof-like finish coveted by collectors.” As a footnote, they carefully add that the US Mint has “not approved, endorsed, sponsored or authorized” their efforts for the 2009 “proofed” silver eagle.

Furthermore, their online price for these “proofed” coins is just under $100 per coin. Ouch.

In reality, the purchasers of this “proofed” coin may enjoy a slightly improved finish over the uncirculated version of the 2009 Silver Eagle in the short term. But, long term, the coin will not retain better than melt value. Why? From a numismatic perspective, the coin has been defaced. Defaced coins do not retain value for their artistic finish.

The better choice for a collector or investor would be to purchase older, but true US Mint, proof versions of the American Silver Eagle.

For example, here’s a beautiful version of the 1997 Eagle’s obverse.

1997 American Silver Eagle Obverse

Isn’t she gorgeous?

Many of these older proof Eagles can be obtained for much less than the purchase price for the “proofed” coin. Whereas the “proofed” eagle’s long-term value is basically the melt value of silver, the true proof coins will retain their value as a proof coin. Yes, there could be some fluctuation within their market, but the value won’t immediately decrease to melt value.

Of course, if people really want a 2009 “proofed” Silver Eagle, the cable shopping channel will be happy to oblige. The purchasers just shouldn’t be surprised or disappointed when they go to sell the coin as a “proofed” coin and dealers only offer the current melt value.

Now, when playing coin word games, you’ll know the difference between uncirculated, proof and proofed!

Note: a link to the web site for the “proofed” coins was intentionally left out of today’s post. If you want to find the site, do a search using “2009 Silver Eagle Overstruck Proofed” in your favorite search engine.

New $600 Requirement

July 22, 2010 · Posted in Coin Collecting Tips, Coin Fraud Tips · Comment 

Today’s post is brought to you by: GovMint.com-2010 Coins Now Available! Click here!

Have you heard about the new 1099 requirement for businesses that was hidden in the Health Care legislation?

In the past, businesses had to report payments to individuals, in lieu of W-2 forms, for services rendered in excess of $600 per year. Financial institutions, such as banks and stock brokerage firms, also used 1099 forms to report interest or dividends they paid to individuals during the taxable year.

Now, with this new law, businesses will have to report any payments over $600 for goods in addition to services. For example, this includes utility bills, telephone bills, office supplies and any other expenses that equate to $600 or more during the year.

You may have also heard on the news and in print that coin dealers are especially concerned about this new requirement. They frequently buy from and sell to many individuals and businesses throughout the year. The amounts per invididual or business frequently will be greater than $600 in the year to an individual or business.

Rather than belabor the point from the dealers’ perspective, let’s think about this from an individual collector and investor’s view.

To refresh your memory, this is what a 1099 looks like:

Form 1099 Miscellaneous Expenses

The gray arrows point to information about the payee. There must be a tax identification number. This can be a Social Security number or it can be a Tax Identification Number. Most individuals would only have a Social Security Number. In addition, the payee’s name and address must be on the form.

“What’s the big deal. This is the dealer’s problem not mine,” you’re thinking.

Are you sure?

What if you want to sell a coin or several coins? Maybe you want to upgrade your collection, cull out some of the lesser coins and use the funds to buy nicer specimens. Or, maybe you invested in gold or silver and want to translate some or all of it back into cash.

Anytime you sell any of your collection, the buyer (the dealer) will have to collect the information noted on the 1099 from you.

“Oh but, I’m only going to sell coins less than $600.”

But, how will the dealer know that you won’t sell him more at a later date within the same year for a total greater than $600? He doesn’t know. Therefore, he will need to maintain the paperwork for every purchase or face IRS penalties.

You’re still thinking, “OK, but this is still the dealer’s problem, not mine.”

Are you sure?

Anytime you provide your Social Security Number to someone, especially someone you don’t know or don’t know how trustworthy all of their employees are, you endanger your identity.

Identity theft causes many problems and takes significant time to correct.

This new requirement makes people vulnerable – especially numismatists and investors.

Criminals already focus on collectors with their various theft schemes. This new legislative reporting requirement gives these villains another avenue to explore and exploit for their nefarious plots.

The good news is that some legislators in both the House and the Senate are trying to repeal this requirement. However, they face stiff competition.

Several dealers are already discussing getting out of the business if this requirement is not repealed.

From a collector or investor’s view, you should let your representative and senator know that this requirement endangers your information and your hobby.

Today’s post is brought to you by: GovMint.com-2010 Coins Now Available! Click here!

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