Perspective on USDA Gaining Access to Your Income Data from IRS

March 19, 2009 07:00 PM

Pro Farmer Editors

Farmers will now have to sign a form at their USDA service center that will allow USDA to have access to income data from the IRS in another effort to cut fraud in government program payments.

The move came in response to a Government Accountability Office study which showed that USDA paid out nearly $50 million to those whose incomes exceeded limits under U.S. farm law.

Before IRS will provide the information for a particular producer, IRS form 8821, or a similar form, must be obtained from each producer authorizing the release of information, according to USDA and failure to obtain such form will make the producer ineligible for program benefits. A written release from each producer or payment recipient will be required for this process.

USDA's Farm Service Agency will not receive actual tax data for the producers. All disclosure and Privacy Act provisions will be adhered to by FSA, according to a news release.

The 2008 Farm Bill included changes in income limits. USDA notes under that law, farm program benefits are not available if recipients' gross non farm income average for the previous three taxable years is greater than $500,000. Additionally, direct payments cannot be paid to participants whose average adjusted gross farm income for the three-year period exceeds $750,000. Participants are ineligible for conservation payments if their nonfarm average gross income for the three-year period exceeds $1 million, unless at least two-thirds of their total average adjusted gross income is derived from farming.

PERSPECTIVE: At first blush, this raised questions with us on whether or not this replaced self-certification for income relative to participation in the farm program and new income limits put in place by the 2008 Farm Bill. But USDA contacts say that you'll still need to self certify income via Form CCC-926, but that USDA will then double-check that data against what the IRS says relative to income you report to them. In other words, you better be sure that what you report to USDA matches what you've said on your tax returns. And if you don't sign the form to let FSA have access to the data from IRS, you're ineligible for farm programs. A little more stick to get at your carrot.

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