Gold/Silver Accounts In Utah

There are a number of states that have been passing laws like Utah's. The laws are basically political statements against the current fiat money system. The bullion coins minted by the U.S. mint have always been legal tender though (the ASE is legal tender for one dollar) so the question is what value to assign to the gold and silver bullion coins?
The assignment of a small, nominal value to legal tender opens the door to a lot of tax issues, and these laws complicate them further. If you agree to work for a dollar an hour as long as you are paid in ASEs, is your income tax computed on the basis of one dollar an hour, or the market value of the silver?

These are actual accounts where they convert 'dollars' into gold or silver dollars and the actual coins are 100% backed in vaults. An American Express card may be attached to the account so as to spend easier. It is a way to actually pay bills using gold or use to accumulate gold at spot. You may withdraw the gold eagles (only 1 oz US gold or silver eagles are used) I don't know if I can mention the name of the organization here so I won't. I just found it interesting.

Cascade: I didn't hear about the Nevada contractor, but it doesn't surprise me that the IRS wants to place a higher value on the mint's own coins. These cases will be tied up in appeal for decades, and most people are going to take the deal to avoid the costs of litigating. Even if you do use a value other than face value, is it spot price on payday, average sale price of ASE? If you don't cash them in right away what is income, and what is capital gain?
There are similar cases involving the appropriate rate of sales tax when items are purchased with ASEs, and the results there are mixed.
The fact that the Nevada case resulted in a not guilty in the first trial, indicates that the issue of value of the currencey wasn't resolved to the satisfaction of the IRS, and that they are trying to get him on some technical reporting requirement rather than addressing the issue of the legal value of bullion coins.
The solution to the problem is to place a higher face value on the bullion coins than the melt value. You see this in the $20 for $20, $50 for $50, etc. Coins that the Canadian Mint is selling, and similar programs in England, France, etc. There is concern that these programs will undermine the fiat currencies, and that people will favor the silver/gold coins over the paper notes, but in the 5+ years that these programs have been in place, there appears to be no such problem. The situation in Canada appears to be the opposite, with the silver coins being traded at less than face value.

Angel: In the U.S. the Federal Government has the exclusive right to mint coins "intended for use as current money", so any system that is minting their own coins and assigning value to them is going to have a problem in that regard. If you Google "NORFED Liberty Dollar" you should be able to get an idea of the Federal Government's position regarding such systems.
With State systems that are using bullion coins minted by the U.S. Mint, there should not be an issue with minting coins, but there could be a problem with assigning a value (or denomination) other than that assigned by the Mint (a federal Agency). There is also the practical issue of what value to assign. If you are going to use the spot price of silver, you are going to have the balance of your account constantly changing.

I googled it and found the "Utah Gold and Silver Depository", which is a private company that you can deposit your slabbed silver and gold coins with, but that appears to be the extent of the services they offer. The actual act passed by the State of Utah just states that U.S. Mint gold and silver coins are legal tender, that the sale of them will not be subject to Utah sales taxs, and that there will be some form of tax credit for capital gains on their sale. It doesn't appear that the state government has any official program, and that it is just private companies offering programs that they think are lawful under the Utah law. I would feel safer just buying bullion direct and holding it myself.

Well put Burton

Lest we forget that depository in Texas and the one in Costa Mesa that were running them like a ponzi scheme and went bankrupt with next to nothing in their storage vaults

That isn't the account I had read about. It is UPMA United Precious Metals Assoc. They only use 1 oz silver or gold eagles as to what the fiat is converted to.

I was surprised to see no interest in these accounts here. I was hoping to get some first hand information. I just read another article about the Chairman at Overstock.com. He seems into this type of security.