Adjusted gross income (AGI) verification is the term for a new certification and compliance process by the USDA Farm Services Agency, in cooperation with the Internal Revenue Service, to determine if farmers are qualified to receive farm program payments.
A key component is the data-sharing process with the IRS. IRS tax information will be used to identify program participants that may not have complied with statutory AGI requirements, or whether further review is required to make an accurate determination.
Although appropriate forms were made available to farmers beginning in January of this year, many farmers have yet to get the forms, fill out the necessary information and mail the forms to the IRS, according to information provided by the FSA.
The consent forms authorize the IRS to disclose information to the USDA for 2009 and 2010 AGI compliance purposes.
Two consent forms, one for individuals and one for legal entities, will be used. Producers may obtain the consent forms at their local FSA service centers or online. USDA service centers will not accept or retain the completed consent forms.
The deadline for producers to submit the consent forms to IRS is June 15, 2010. As required by law, producers must sign the applicable form to grant IRS the authority to provide tax information data to USDA.
After June 15, a reconciliation process will be initiated to identify producers who have not filed a consent form. After receiving the consent form, IRS will check each participant's AGI compliance by performing computerized calculations that indicate whether or not a producer exceeds average AGI limitations.
Average AGI calculations for 2009 are computed based on the 2005, 2006 and 2007 tax years. Average AGI calculations for 2010 are computed based on the 2006, 2007 and 2008 tax years.
Producers whose average AGI appears to be in excess of the statutory AGI limitations will be notified in writing of the results and provided the opportunity to make available within 30 days to the appropriate FSA state office, a third party verification from a certified public account or attorney that demonstrates AGI limitations have not been exceeded.
Producers determined not in compliance with AGI limitations will be offered appeal rights to either the FSA state committee or the National Appeals Division.
Producers who fail to respond to written notices of AGI non-compliance will be notified of the requirement to refund the applicable payments. Actions required by the Debt Collection Improvement Act will be followed by the NRCS and FSA.
The Supplemental Revenue Assistance Payments (SURE), a new USDA disaster program, may work best for farmers who are not diversified.
SURE may work best with farmers who grow only one crop, according to Francis Tolle, Oklahoma Farm Agency executive director.
Producers interested in the program can get either form CCC 927 or CCC 928, consent to disclose tax information and return that information to the IRS by June 15, 2010. IRS will need income data for 2006, 2007 and 2008.
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