Dear Ms. Olson:
It has been brought to my attention that due to the long evolution of federal farm subsidies,it would be appropriate for your department to review all of the current reporting requirements anddetermine if there is adequate published compliance guidance currently available on all types offederal farm subsidies.
As you know, throughout my career and now as the Chairman of the Senate FinanceCommittee, I have always believed that the only way to have a tax system based upon voluntarycompliance by American taxpayers is to have fair and forthright educational tools available for thepublic and their advisors. This requires the Treasury and the Internal Revenue Service to review,update and reach out to those taxpayers with adequate written guidance.
Over the last few months it has been brought to my attention that the reorganization of theIRS has resulted in the termination of several agricultural tax teaching programs traditionallycoordinated with agricultural universities. I find it disturbing that as the complexity of agriculturaltax compliance increases, the IRS has discontinued the availability of any training programs in thishighly specialized area. It is a shame when you have taxpayers and their advisors striving to educatethemselves in the correct methods of reporting that the program would be cut off for reasons basedsolely on reorganization.
In addition, I have also been made aware of the fact that there also seems to beinconsistencies in the "Market Segment Specialization Program", Audit Technique Guide forFarming, in reference to the correct reporting of government farm program payments. As you know,the farming economy traditionally does not work on sufficient margins from year to year to affordthe luxury of realizing there are inconsistent reporting techniques upon audit several years after filinga tax return.
I believe that Rev. Rul. 87-103 needs to be reviewed and updated. In addition, I also thinkthere is uncertainty as to the filing and reporting requirements surrounding Form CCC 1099-G. Weshould be helping and not hindering the American taxpayers and their advisors who are strugglingto give sound advice and simply file the correct forms.
Please direct your staff to start the review and update of Rev. Rul. 87-103 along withappropriate reporting requirements by the correct government agencies, to give full updatedcompliance directions for all of the federal farm subsidy payments, including U.S. Department ofAgriculture's current commodity certificate program.
In closing, I remind you, we need to keep American farmers doing what they do best --feeding America, and not becoming bogged down by unclear guidance. Sound, prompt guidance bythe U.S. Treasury will avoid that result.
Sincerely,
Charles E. Grassley Chairman
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Source: Ranking Member’s News
