Agency computes whether taxpayers meet criteria

By MATTHEW WEAVER
Capital Press

Two USDA agencies are working with the Internal Revenue Service to ensure program payments get to eligible farmers.

The USDA and the IRS on Dec. 31 signed a memorandum of understanding that established an electronic information exchange to verify compliance with adjusted gross income provisions for programs administered by the Farm Service Agency and Natural Resources Conservation Service.

The agreement ensures payments won't go to producers with an adjusted gross income exceeding the limits set in the 2008 Farm Bill. The limits are:

* $500,000 nonfarm average adjusted gross income for commodity and disaster programs.

* $750,000 farm average adjusted gross income for direct payments.

* $1 million nonfarm average adjusted gross income for conservation programs.

The limits are designed to ensure payments do not go to people with a nonagriculture primary income, said Chris Bieker, outreach coordinator for the Farm Service Agency.

In the past, the agency worked with producers, but not the IRS. Personal tax information will remain private.

"The difficulty became, how do we keep that information private and at the same time make sure we're adhering to these new, tighter rules to prevent any fraud occurring?" Bieker said.

Individuals who sign up for the agency's programs send a form to the IRS, which then informs FSA if individuals exceed the income limits.

"It impacts farmers in that they have another form to fill out," Bieker said.

When the change was announced, concerns arose that the IRS would be sharing personal data with the agency.

"We want to reassure (farmers) that's not taking place," Bieker said.

According to USDA, the electronic process reviews data from tax returns and performs a series of calculations, comparing values to the adjusted gross income limits from the Farm Bill.

The agency and conservation service then receive a record indicating whether the program participant meets the income limits.

Participants with an adjusted gross income exceeding the limits have the opportunity to provide third-party verification or other information to validate their income.

Bieker said the change is in effect for programs from 2010 forward. The agency is still working out details for how 2009 programs are handled, she said.