What This Letter Means
Letter 4567, Introduction Letter for PMSJ Dealers, starts an IRS examination of a business that may deal in precious metals, precious stones, or jewels (PMSJ). This is a Bank Secrecy Act examination under Title 31, not an income tax audit. The IRS is checking whether your business is required to have an anti-money laundering (AML) compliance program and, if it is, whether the program meets the rules.
Who Is a Covered Dealer
Under the Title 31 regulations, a business generally becomes a covered dealer when it purchases more than $50,000 in covered goods and receives more than $50,000 in gross proceeds from selling covered goods during a year. A dealer then has six months to put an AML program in place. Some retailers are exempt. Status has to be reassessed every year.
The examiner doesn't set the examination period until it's clear whether your business must have an AML program. If you are a covered dealer, the period examined is usually the most recent 12 months. If you weren't required to have a program during that period, the case can be closed without an examination.
What to Do
- Contact the examiner named in the letter and schedule the appointment.
- Figure out your dealer status. Pull purchase and sales records for covered goods for the current and prior year.
- Gather your AML program documents: written policies, the compliance officer designation, training records, and any independent testing.
- Expect Form 8300 questions. These exams can also cover reporting of cash payments over $10,000 received in your business.
Don't guess about dealer status in your first conversation. What you say early shapes the scope of the exam. You can have a representative handle the contact for you.
If your business received Letter 4567 and you want counsel before the first meeting, call us at (813) 229-7100.