CRP Payments Subject to Self-Employment Tax?
By Stephen Frerichs
Overtime and after much litigation, the IRS has taken the position (and had it upheld) that conservation and land maintenance obligations that are part of a CRP contract constitute a farming trade or business that makes the CRP payments subject to self-employment income tax for farmers. More recently, the U.S. Tax Court issued a ruling that CRP payments are subject to the self-employment tax even if the landowner is not a farmer.
In the Morehouse v Commissioner of Internal Revenue case, the U.S. Tax Court ruled that a landowner or investor — who was not involved in the trade or business of farming — could be subject to the self-employment tax based on engagement “in the business of participating in the CRP.” This business includes enrolling and maintaining properties in the CRP and making management decisions in accordance with the terms of the CRP contracts.
The U.S. Tax Court decision hinges on its determination that CRP payments are not rental payments, despite the fact that USDA calls them such. A 2006 decision in a federal appeals court concluded that a CRP contract is not a rental payment that gives USDA the right to use or occupy the CRP land in exchange for CRP payments. Instead, that court found that the CRP payment is a payment made by USDA in exchange for the services of the landowner in undertaking activities on the land that meet the commitments in the CRP contract.
The Morehouse case may be appealed. It is probably best to consult a tax advisor! You can find a copy of the case here: https://www.ustaxcourt.gov/InOpHistoric/MorehouseDiv.Marvel.TC.WPD.pdf
Weather, Crop Progress Levers Farmland Demand
A diverging market seems to be developing between the eastern Corn Belt and Iowa. And the key difference is crop prospects.
Yield prospects are on the upswing east of the Mississippi where timely rains have resulted in excellent crop potential from Illinois through Ohio. As a result, farmland demand has remained strong — with record high prices paid at some auctions — despite the drop in cash corn and soybean prices. Login to Member Resources and download the latest issue: http://portal.asfmra.org/Scripts/4Disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=27&Time=820983562&SessionID=62057594yhofx712z58m6ib178uofz4n8xa01t8fypx92ywdh85706r0j6bv566f&MenuKey=123
USDA Coordinates Cover Crop Policy
By Stephen Frerichs
The growing use of cover crops for the improvement of soil quality, nutrient cycling, nitrogen production, erosion control, weed management, and soil moisture availability has created high levels of interest regarding cover crops among farmers. The National Resource Conservation Service (NRCS) has been promoting the use of cover crops through its cost share programs. The Risk Management Agency (RMA) has found that its crop insurance policies sometime conflict with NRCS science. USDA has determined that it needs a better, coordinated approach regarding cover crops. RMA, NRCS, the Farm Service Agency (FSA), and various private sector stakeholders and cover crop experts have been working together to develop cover crop management guidelines across Federal crop insurance policies that will reference the NRCS guidelines for cover crop farming practices.
These guidelines form recommended cover crop management practices and proper termination timeframes for each crop production area. The Cover Crop guidelines were released in June for non-irrigated crops for the 2014 crop year. You can find more about crop insurance and cover crops here: http://www.rma.usda.gov/pubs/rme/covercrops2.pdf
Immigration reform crucial for health of U.S. agriculture sector?
White House report claims agriculture in a jam without reform
Aug. 8, 2013 David Bennett | Delta Farm Press
A report released by the White House on Monday claims that without a major overhaul of immigration laws U.S. agriculture is destined for a loss of jobs, money and farming operations.
The timing of the report’s release was no coincidence. The White House is very interested in keeping immigration reform at the forefront of concerns sure to be expressed to lawmakers by constituents during the August recess.
Read more on the Delta Farm Press website: http://deltafarmpress.com/government/immigration-reform-crucial-health-us-agriculture-sector?NL=DFP-01&Issue=DFP-01_20130809_DFP-01_207&YM_RIDfirstname.lastname@example.org&YM_MID=1415267&sfvc4enews=42
Broad support needed for new farm bill
By Logan Hawkes
The hope of a new farm bill requires the support of more than just farmers and ranchers according to National Cotton Council Chairman Jimmy Dodson; it will need broad support from American consumers who will actually benefit from comprehensive agricultural legislation.
Read more on the Southwest Farm Press website: http://southwestfarmpress.com/cotton/broad-support-needed-new-farm-bill?NL=SWFP-01&Issue=SWFP-01_20130820_SWFP-01_88&YM_RIDemail@example.com&YM_MID=1417234&sfvc4enews=42
We were just notified there is a company calling members offering reduced rates at the Peppermill Resort, headquarters for this year’s Annual Meeting & AgroNomics, Vision 2014. The company is claiming to be an exhibitor housing service and offering $85 room rates if you act quickly. Please be aware that this company has no affiliation with ASFMRA or with the Peppermill Resort. In researching the number on the Internet, we found multiple complaints against this group. These scam calls are coming from 800-217-4402. Do not provide this group with any of your confidential information or credit card numbers.
Please note that it is against our policy to share our members’ names and contact information. You will never be contacted by any of our meeting hotels unless an ASFMRA staff member has visited with you in advance.
To securely make your reservations for the 84th ASFMRA Annual Meeting/AgroNomics Vision 2014, visit http://www.agro-nomics.org/hotel.htm or call Peppermill Reservations at 1-866-821-9996. Be sure to let them know you are part of Group Reservation Code: AASFM13. The official deadline for hotel reservations at our discount rates is October 21, 2013. If you have any questions, please contact Cheryl Cooley at firstname.lastname@example.org or 303-692-1215.