Saturday, March 21, 2009

Farmers will have to let IRS give USDA information on their income in order to get federal payments

Farmers will have to authorize the Internal Revenue Service to give their income data to the U.S. Department of Agriculture in order to receive federal payments, in response to an investigation that found almost $50 million went to ineligible recipients last year.

Some farm programs limit payments to farm operators with incomes above certain levels, and "The 2008 Farm Bill prohibits payments to anyone with a taxable non-farm income greater than $500,000," notes Bob Meyer of Brownfield Network. USDA told the Government Accountability Office last year that it couldn't guarantee the rules were being followed because it didn't have access to income information. A GAO audit found that at least 2,702 farmers got subsidies from 2003 to 2006 even though they made more than the former income limit of $2.5 million.

"Beginning with the 2009 crop year and for all successive years, USDA will require producers to sign a form granting IRS the authority to provide income information to USDA for verification purposes," Meyer reports, quoting a USDA spokeswoman as saying that the Farm Service Agency won't get actual tax data and will obey the Privacy Act. (Read more) For a summary of the GAO audit, click here. For a PDF of the full report, click here.

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