IRS eases burden on farmers.The Internal Revenue Service agreed to let farmers use a longstanding tax break that allows them to use commodity contracts to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. income. Notice 97-13 says farmers will not have to change how they report sales deferred commodity and livestock livestock Farm animals, with the exception of poultry. In Western countries the category encompasses primarily cattle, sheep, pigs, goats, horses, donkeys, and mules; other animals (e.g., buffalo, oxen, or camels) may predominate in other areas. contracts on their 1996 income tax returns. Farmers who had big crops in 1996 could have faced large tax bills as a result of an IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. ruling that income be taxed in the year the crops were sold. Farmers often use commodity contracts to distribute their tax burden by deferring income from one year to the next. The delay will give Congress time to rewrite re·write v. re·wrote , re·writ·ten , re·writ·ing, re·writes v.tr. 1. To write again, especially in a different or improved form; revise. 2. the 1986 law on which the ruling is based. Senator Charles E. Grassley (R-Iowa) said he would pursue legislative efforts to reverse Ilks technical advice memorandum 9640003 that was issued in October 1996. Grassley said farmers received the fair treatment they deserve. "The IRS backed down and responded to the common sense, bipartisan leadership of 57 senators," said Grassley. Also included in the notice is a provision that allows farmers to change the method of accounting for income received from deferred payment sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. when they compute To perform mathematical operations or general computer processing. For an explanation of "The 3 C's," or how the computer processes data, see computer. their alternative minimum tax for the 1997 tax year. Farmers can request an accounting method change by attaching form 3115 to their 1997 income tax returns due in 1998. For more information regarding notice 97-13, contact Jonathan Strum, IRS Income Tax and Accounting Division, at 202-622-4960. |
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