Rep. Frank Lucas, Chairman of the House Agriculture Committee, today issued a statement in response to the Commodity Futures Trading Commission's (CFTC) surprise "advisory notice" to further regulate cross-border swaps.
Ag Chairmen Press Archer on Alternative Minimum Tax
WASHINGTON, D.C. - Contending that new tax legislation can end the erroneous application of detrimental internal revenue service rulings for farmers, House Agriculture Committee Chairman Bob Smith (R-OR) and all five of the Committee's Subcommittee Chairmen have written Ways and Means Committee Bill Archer (R-TX), urging that Archer's Committee reassess the Alternative Minimum Tax (AMT) provisions of it's tax bill included as a part of budget reconciliation.
Smith was joined by Rep. Larry Combest (R-TX), Rep. Tom Ewing (R-IL), Rep. Bill Barrett (R-NE), Rep. Bob Goodlatte (R-VA), and Rep. Richard Pombo (R-CA) in contacting Archer. The complete text of the Agriculture Committee's letter follows this release.
"We urge you to reassess the Alternative Minimum Tax (AMT) provisions of your tax reduction package relating to agriculture producers. In our view, Congress never intended to subject farmers' deferred payment contracts to AMT. Nevertheless, the IRS has been retroactively subjecting farmers who used deferred payment contracts to AMT liability," the Chairmen wrote Archer.
"The IRS claims it was given the authority to subject deferred contract commodity sales to AMT pursuant to changes in the tax code in 1986 and 1987. We disagree. However, in order to allow the Congress to speak to the issue of the IRS's treatment of AMT for farmers, the Administration declared a moratorium for the 1996 tax year. For this reason, it is imperative that we act now to provide a definitive solution to this problem," the Chairmen wrote.
"In our view, requiring farmers, who have traditionally used deferred contract commodity sales, to retroactively pay the AMT, produces an unfair tax burden on family farmers and has upset the otherwise orderly process of marketing commodities. The uncertainty created by the IRS has put pressure on processing facilities and farmers who have become reluctant to use deferred payment contracts. In addition, the steps taken by the IRS will effectively eliminate the cash basis of accounting for farmers, which is specifically allowed under the tax code," the Chairmen wrote.
Smith represents Oregon's Second Congressional District, which includes most of eastern, southern, and central Oregon, in the U.S. House of Representatives.