WASHINGTON – U.S. Senators Amy Klobuchar (D-MN) and Tina Smith (D-MN) pushed the Internal Revenue Service (IRS) and Department of Treasury to provide farmers with long-overdue guidance on the Republican tax law before filing deadlines this year. The GOP tax law passed in 2017 and created substantial changes to the federal tax code for certain agricultural cooperatives. Despite promises from the IRS and the Department of Treasury that guidance would be issued by the end of 2018, it still has not been delivered.

In a letter to IRS Commissioner Charles Rettig and Treasury Secretary Steven Mnuchin, the senators emphasized that farmers have reported the lack of guidance might prevent them from filing taxes on time and without penalty.

“American farmers today face unprecedented challenges—falling crop prices, retaliatory tariffs, and changing climate patterns, to name just a few,” the senators wrote. “In the midst of this economic and regulatory uncertainty, farmers should not have to face additional uncertainty from the IRS when filing their tax returns. Unfortunately, that is exactly where many farmers find themselves this tax season.

“The agricultural sector is a cornerstone of the U.S. economy, and we owe it to farmers and ranchers to deliver a fair and predictable tax code. Unfortunately, while some large companies may have the resources, attorneys, and accountants needed to navigate these complex new tax provisions for which regulations have not been written, smaller farms continue to bear the burden of this filing uncertainty—even with the April deadline extension. These smaller farmers should not be needlessly penalized because of the IRS’s own administrative delays.”

In addition to Klobuchar and Smith, the letter was also signed by Senators Debbie Stabenow (D-MI), Richard Durbin (D-IL), Jeff Merkley (D-OR), and Elizabeth Warren (D-MA).

The full text of the letter can be found below.

Dear Commissioner Rettig:

American farmers today face unprecedented challenges—falling crop prices, retaliatory tariffs, and changing climate patterns, to name just a few. In the midst of this economic and regulatory uncertainty, farmers should not have to face additional uncertainty from the IRS when filing their tax returns. Unfortunately, that is exactly where many farmers find themselves this tax season.

As you know, many farmers and fishers are required to file and pay taxes by March 1. While we appreciate the IRS's recent decision to effectively delay this deadline until April 15, the Trump Administration has failed to provide regulations and guidance on key provisions from the 2017 tax law and subsequent tax legislation that farmers need to prepare their 2018 tax returns.

We have heard from farmers across our states who are worried about this missing guidance, the lack of which is preventing them from filing with certainty, on time, and without penalty. Even with additional time, these farmers have told us that the new April deadline-now less than six weeks away--does not provide much consolation without the needed interpretive guidance. We are therefore asking that IRS promptly provide the necessary guidance so that farmers can rectify unresolved issues and file on time.

In the 2017 tax law and subsequent legislation, Congress provided special rules for applying the new Section 199A deduction for certain agricultural cooperatives. When the proposed regulations accompanying 199A were issued in August 2018, the Treasury and IRS stated they "intend[ed] to issue separate proposed regulations describing rules for applying Section 199A to specified agricultural and horticultural cooperatives and their patrons later this year.” But that proposed guidance never came. While this is not the only issue farmers face in complying with the 2017 tax law, it is among the most immediate, significant, and problematic.

The agricultural sector is a cornerstone of the U.S. economy, and we owe it to farmers and ranchers to deliver a fair and predictable tax code. Unfortunately, while some large companies may have the resources, attorneys, and accountants needed to navigate these complex new tax provisions for which regulations have not been written, smaller farms continue to bear the burden of this filing uncertainty-even with the April deadline extension. These smaller farmers should not be needlessly penalized because of the IRS's own administrative delays.

For many working families and farmers, the 2017 tax law represents a nearly $2 trillion broken promise-false claims about increased wages have not materialized , and our already massive national debt continues to grow as a result of tax cuts that were never going to pay for themselves . But the Administration has a chance now to further help family farmers by issuing the promised guidance so farmers can file confidently by the IRS-imposed deadline.

Sincerely,

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