Self-Directed Investor Talk Episode #1

The IRS is on the Warpath Against Self-Directed IRA’s

August 1, 2017  --  Episode #1

Transcript    ∙    Links & Resources    ∙    Discussion



  • The U.S. National Debt is approaching $20 trillion dollars!
  • It’s the job of the IRS to collect the taxes to pay off that debt.
  • There’s a total of more than $25 trillion in retirement assets in America
  • Most vulnerable portion of that is in self-directed IRA’s, because it’s possible for IRS to confiscate the entire account value on account of “prohibited transactions”
  • Self-directed IRA’s are totally legal, and with proper care, prohibited transactions can be avoided


Do you use a self-directed IRA?  If so, Bad news:  The IRS is on the warpath and you could be public enemy #1 to them.  I’m Bryan Ellis.  I’ll tell you what’s going on and what you can do about it right now, in this freshly updated edition of Episode #1.

Hello, Self-Directed Investors coast to coast and all across the fruited plane!  Welcome to the podcast of record for savvy self-directed investors like YOU, where each day, I help you to FIND, UNDERSTAND and PROFIT from exceptional alternative investment opportunities!

This show is sponsored by the Self-Directed Investor Society, America’s LEADING private association for alternative asset investors.  You can learn more about the SDI Society by visiting

My friends, the IRS is in a VERY FOUL MOOD when it comes to self-directed IRA’s.  Very foul, indeed… driven by the EXTRAORDINARY national debt of the United States.  And that foul temper can have a tremendously, irreparably bad effect on the value of your IRA.  If you have a self-directed IRA, stop what you’re doing for the next 10 minutes and listen closely.  It’s that important for you.

As we dig into today’s topic, I encourage you to participate in the show.  If you like email, send your questions to me at [email protected]  If you prefer the telephone, call my 24-x toll-free SDI Listener Q&A line at 833-SDI-TALK.  Or the best idea of all is to join the conversation that’s already taking place in the discussion area at the bottom of today’s show page.

Today’s show is, of course, Episode #1, so today’s show PAGE is … see what I did there?  Hehehe

Hey, real quick… Hugh Hefner of Playboy Magazine fame recently pulled off a BRILLIANT real estate coup, when he sold the Playboy Mansion in LA for a whopping $100 MILLION dollars. But it’s HOW he did it that’s so fascinating… and curiously, the very same strategy Hefner used can make it possible for YOUR real estate investments to be tax-free on the front end AND the back end… as if you were using a Traditional IRA and a Roth IRA at the SAME TIME! It’s called the Hourglass Protocol, and I teach it exclusively to member of the Self-Directed Investor Society, BUT if you’d like a sneak peak into this POWERFUL tax elimination tool for your real estate investments, then visit today’s show page right now to download it, or just text the word “protocol” to 44222 and I’ll send it to you right away at no cost. Yes, Hefner is a dubious character, BUT… if you want to learn how to never again have to CHOOSE between the benefits of using a Traditional IRA or Roth IRA… and just get BOTH benefits instead, then visit today’s show page now or text the word PROTOCOL with no spaces to 44222 now to download the Hourglass Protocol special report at no cost right now while you still can!

Have you ever heard of the US Debt Clock?  It’s a cool web page that I’ve linked to in today’s show notes that gives us a real-time, constantly updated value for the U.S. national debt.

The current number?

$20 Trillion Dollars.  Tr-Tr-Tr-Trillion.  That’s a staggering amount of money… and yet, any day now, the U.S National Debt will cross that line… Absolutely staggering.

What’s more, it’s increasing at an alarming rate.  By the end of this show – about 7 minutes in total – the national debt will have ballooned by another $5.5 million.

Absolutely staggering.

But this isn’t a show about the U.S. National Debt.  It’s a show about your self-directed IRA, and how that might land you on the short end of the battle that Uncle Sam is waging against that national debt.


Let’s apply our logical faculties to this problem, shall we?

Who’s job is it to collect the revenue to make up that massive $20 TRILLION shortfall?

Why, our friends at the IRS, of course!

And here’s one important fact that they know far better than you or I know:

As of the end of last year – 2016 – there’s a certain pool of capital in the United States that dwarfs even the national debt.

That capital pool is total RETIREMENT ASSETS – things like IRA’s, 401k’s, pensions, etc. – which stands at over $25.4 TRILLION according to some research from the Investment Company Institute, which you can find on today’s show page at

Of that, about $8 TRILLION is held in IRA’s alone.

Frankly, I’ll bet the IRS wishes they could just confiscate every penny of that and put a major dent in the debt.  But they can’t do that… unless, of course, you’re talking about Self-Directed IRA’s.

What is a self-directed IRA? It’s an IRA that’s nearly without limits… It’s an IRA in which you can invest in nearly anything… real estate, precious metals, pre-ipo companies, intellectual property, livestock… the sky’s the limit!

Contrast that with “conventional” IRA’s… I call them CAPTIVE IRA’s because most of the companies that offer IRA’s force you to use your IRA money to invest exclusively in the financial products they offer, like CD’s, stocks and mutual funds.

But what happens if you’re offered the chance to invest in an asset that doesn’t fit in the typical retail investment category that Wall Street loves to push?

Well, my friends the answer is this:  If you’re using one of those CAPTIVE IRA companies that severely restrict your choices, you’re probably out of luck.  But if you have an IRA with a real self-directed IRA custodian, chances are you’ll be able to take advantage of the opportunity exactly as you please!

And for your convenience, a link to the SDI Society’s definitive list of REAL Self-Directed IRA custodians and administrators is available to you on today’s show page at

But why is the IRS intent on attacking self-directed IRAs?  The biggest reason is this:  They’re vulnerable.  It’s easy to make an error in a self-directed IRA that could literally cause you to lose the ENTIRE ACCOUNT to the IRS.

In other words, self-directed IRA’s are a major honeypot for Uncle Sam.

How easy is it to make one of those errors?

Imagine this scenario:  Your IRA has accumulated several houses, and you’re IRA has bought insurance for all of those houses through the same agent.  That agent sends you a Christmas gift each year, and he gives you nice discounts on insurance for your own home because you’re a “high-volume customer”.

Well, bad news my friend. You may have just destroyed your IRA and subjected it to huge financial penalties. That’s because the IRS is allowed to interpret your receipt of gifts and discounts as a benefit that YOU are receiving personally as a function of the use of the IRA’s assets… and that’s prohibited.

You were just buying insurance at a slightly discounted rate… only a couple hundred dollars a year in difference.  Nothing big at all… but it could cost you tens or hundreds of thousands of dollars.

These transgressions are called prohibited transactions in tax parlance. There are hundreds of other ways to commit one of them through a self-directed IRA. That’s exactly why the IRS is focused on this highly vulnerable subset of the retirement account world. It’s these prohibited transaction rules that make self-directed IRAs, the low-hanging fruit, in the IRS’s quest to collect enough money to pay down the $20 trillion national debt.

And my friends, this isn’t theoretical.  We don’t have time to get into it now, but check out for links to some of the actions that members of Congress and the federal government have been taking recently that specifically target self-directed IRA’s.  It’s rather chilling.

So bottom line:  this sector is getting serious attention from the Feds. It’s only going to get worse from here.

But there’s good news. Self-directed IRAs are 100% legal. It’s actually quite simple to keep them in full compliance, so that even if the IRS does come calling, you’ll be fine.

But there is one strategy that’s both very popular among self-directed IRA owners, and very fraught with peril.  That strategy is called the CHECKBOOK IRA… and I’ll give you the skinny on that – both good and bad – in Episode #2 of this very show, which is available for you to download at NO COST right now on today’s show page at

Check it out right away.  And hey, I’ve got a question for you to ponder:  Are you well prepared in the event that the IRS chooses to audit YOUR self-directed IRA?  If so, what are you doing to give yourself that confidence?  Join the discussion about this topic on today’s show page at

My friends… invest wisely today and live well forever!


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Bryan Ellis

I am host of Self Directed Investor Talk, which I'm told is America's #1 podcast and for affluent self-directed investors. I'm also something of an expert in self-directed IRA's, solo 401k's and 1031 exchanges. You can find more of my writing in some cool places like,, ThinkRealty and even Forbes (that was always one of my goals!). I live in metro Atlanta, Georgia with my wife and business partner Carole Ellis(she's a real business partner... not just because she's my wife... I'd want to work with her if I wasn't married to her... and I'd want to marry her, too). I also have 4 children ranging in age from 2 to 20 (yes, you read that correctly). It's my goal to be the name everybody thinks of when they think of Self-Directed IRA's and Solo 401(k)'s.