Aaron Martin, executive director of the USDA’s Farm Service Agency in North Carolina announced that USDA is partnering with the Internal Revenue Service to reduce fraud in farm programs and streamline payment limits for family farmers.
The actions are intended to strengthen the integrity and defensibility of USDA farm safety net programs and help the agricultural industry meet requirements included in the 2008 Farm Bill.
“Today’s announcement will ensure that the producers who depend upon the safety net of USDA programs will have future access to these programs by enhancing the overall integrity of the programs,” said Martin. “It will also provide more flexibility for family farm operations across the country.”
As part of the announcement, USDA has finalized a memorandum of understanding with the Internal Revenue Service to establish an electronic information exchange process for verifying compliance with the adjusted gross income provisions for programs administered by USDA’s FSA and Natural Resources Conservation Service. The agreement will ensure that payments are not issued to producers whose adjusted gross income (AGI) exceeds certain limits. The limits set in the 2008 Farm Bill are $500,000 non-farm average AGI for commodity and disaster programs; $750,000 farm average AGI for direct payments; and $1 million for non-farm average AGI for conservation programs.
The electronic process that USDA developed with the IRS reviews data from tax returns, performs a series of calculations, and compares these values to the AGI limitations from the 2008 Farm Bill . Written consent will be required from each producer or payment recipient for this process. No actual tax data will be included in the report that the IRS sends to USDA. As part of the review and evaluation process, participants whose AGI may exceed the limits will be offered an opportunity to provide third party verification or other information to validate their income.