IRS eases burden on farmers.
Farmers who had big crops in 1996 could have faced large tax bills as a result of an IRS 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 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 when they compute 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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|Publication:||Journal of Accountancy|
|Article Type:||Brief Article|
|Date:||Apr 1, 1997|
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