Home Storage Gold IRA: Why It's Risky and What the IRS Says

A segment of the precious metals industry markets something called a "home storage gold IRA" or "home delivery IRA"—an arrangement that supposedly allows you to keep physical gold from your IRA in a safe at your house. The pitch is straightforward: full control, immediate access, no ongoing storage fees, and the comfort of knowing exactly where your assets are at all times.

The problem is that the IRS disagrees with this arrangement, has challenged it repeatedly in court, and has been winning. For investors who have set up home storage IRA structures, the stakes are high: disqualification of the entire IRA, with everything in the account treated as a taxable distribution in the year the problem arose.

This article explains what home storage gold IRAs actually are, why the IRS objects to them, what the courts have said, and what you should do instead.

What Is a "Home Storage Gold IRA"?

A home storage gold IRA is not a formal IRS designation—it is an industry marketing term. The actual legal structure behind these arrangements typically involves a "checkbook control" or "checkbook IRA" setup:

1. You establish a limited liability company (LLC) owned by your IRA.
2. You become the manager of that LLC.
3. The LLC opens a bank account with checkbook access, which you control as manager.
4. The LLC uses its funds to purchase physical metals.
5. Because the metals are technically owned by the LLC (not directly by you), proponents argue you can store them anywhere the LLC maintains an "office"—including your home.

Promoters of this structure argue that since you are acting as LLC manager rather than directly as IRA owner, you are not taking a prohibited distribution. The IRS and the Tax Court have rejected this reasoning in several significant cases.

Why the IRS Rejects Home Storage

The foundation of the IRS position is IRC Section 408(a), which requires that IRA assets be held by a qualified trustee or custodian—not by the IRA owner, and not by an entity the IRA owner controls. The IRS views the checkbook LLC arrangement as a transparent attempt to circumvent this requirement.

The key issue is "constructive receipt." If you, as IRA owner, have the ability to physically access and control the metals—even if they are technically titled to an LLC—the IRS considers you to have constructively received a distribution. The economic substance of the arrangement (you can walk to your safe and take the gold) controls over the legal form (the LLC "owns" it).

Additionally, when you manage an LLC that is owned by your own IRA, the IRS may treat your management activities as a prohibited transaction under IRC Section 4975—specifically, as providing services to a plan for compensation, or as a self-dealing transaction between you and a plan in which you have an interest.

What the Tax Courts Have Said

Several Tax Court cases have addressed home storage IRA arrangements, and the outcomes have consistently gone against taxpayers who attempted them.

In the often-cited case McNulty v. Commissioner (T.C. 2021), the Tax Court ruled definitively that an IRA owner who stored American Gold Eagle coins at her home—using a checkbook LLC structure exactly as marketed by home storage IRA promoters—had taken a taxable distribution equal to the value of the coins. The entire IRA was disqualified, and the couple faced significant income taxes plus penalties on the full account value.

The court rejected the argument that the LLC created sufficient legal separation to satisfy the custodian requirement. The practical reality that Mrs. McNulty had physical access to and control over the coins was decisive.

This case is not an isolated ruling. The IRS has pursued similar challenges against other taxpayers, and the Tax Court has consistently applied the same reasoning: physical control by the IRA owner, through any structure, equals constructive receipt.

The Specific Penalties at Stake

The financial consequences of a failed home storage IRA structure are severe:

• Full IRA disqualification: The entire account balance is treated as distributed on January 1 of the year the prohibited transaction or distribution occurred—not just the metals you stored at home.
• Ordinary income taxes: The distributed amount is added to your taxable income for that year. If the IRA held $200,000 in gold, you owe income taxes on $200,000 in the year of disqualification.
• 10% early withdrawal penalty: If you are under age 59½ when the distribution is deemed to occur, an additional 10% penalty applies to the full amount.
• Accuracy-related penalties: If the IRS finds you substantially understated your income or were negligent in following the rules, an additional 20% accuracy-related penalty may apply on top of the tax owed.
• Interest: All unpaid taxes accrue interest from the original due date of the return.

For a taxpayer in the 22% marginal bracket with a $150,000 IRA, disqualification could mean $33,000 in federal income taxes plus a $15,000 early withdrawal penalty—nearly a third of the account's value gone in a single year, before any state taxes.

What About a Bank Safe Deposit Box?

Some investors wonder whether renting a bank safe deposit box in their own name—rather than storing metals at home—would satisfy the storage requirement. The IRS has consistently taken the position that it does not. A safe deposit box rented in the name of the IRA owner gives the owner personal access to the contents, creating the same constructive receipt problem as home storage. The metals must be held by the IRA custodian at an approved depository—not in a personal safe deposit box, regardless of location.

Legitimate Alternatives to Home Storage

If your concern is control, transparency, and the peace of mind of knowing exactly what metals you hold, there are legitimate ways to achieve those goals without triggering IRS scrutiny:

Segregated storage at an approved depository: Your specific coins and bars are stored in a separately identified vault space in your name. You receive periodic statements listing the exact items held, their serial numbers, and their weights. You know precisely what you own—it simply lives at an insured, regulated facility rather than in your home.

Depository with inspection rights: Some depositories allow account holders to schedule visits and physically inspect their stored metals. You can confirm your holdings are exactly as documented without taking possession.

Separately owned physical metals outside the IRA: There is nothing preventing you from purchasing physical gold or silver outside of a retirement account, with no custodian requirement and no storage mandate. You can hold whatever you want in a home safe—it simply will not receive IRA tax treatment. Many investors split their precious metals strategy: IRA-held metals in a depository for tax-deferred growth, and personally held metals at home for immediate access and outside-the-system diversification.

How to Spot Home Storage IRA Marketing

Home storage IRA promoters often use specific language that signals their pitch. Watch for terms like:

• "Checkbook IRA" or "checkbook control IRA"
• "Home delivery IRA"
• "Be your own custodian"
• "IRA LLC" with home storage as an explicit feature
• Claims that a specific legal structure "makes it legal" to store IRA gold at home

Any company that markets home storage as a legitimate IRA strategy should be avoided. The Tax Court has spoken clearly on this. The promoters may offer legal opinion letters claiming their structure is sound, but those letters have not protected taxpayers in court, and the IRS does not consider them authoritative.