Grassley Seeks Tax Penalty Relief for Farmers

Included in the group of taxpayers who may not be able to file until late February or early March are many family farmers. While this delay in filing is not ideal for any taxpayer, it is especially worrisome for famers who are generally required to file by March 1st or face owing estimated payment penalties. The delay in filing means farmers may still be waiting on forms they need to file a complete return on March 1st. Farmers should not be penalized for the President and Congress' failure to act on tax legislation on a timely basis. The IRS should do all it can to ensure forms are ready as soon as possible, but should be prepared to grant penalty relief to farmers who are unable to meet the deadline due to the delay.

IRS has provided such relief in the past. Last year, the bankruptcy of MF Global delayed the issuance of Forms 1099 to its customers, many of which were farmers. As a result, the IRS implemented a process by which farmers could request a waiver of the estimated tax penalty they otherwise would owe for failing to meet the March 1st deadline. The IRS should implement similar procedures for farmers this year. These procedures should be announced sooner rather than later to save farmers from the headache and heartburn associated with the current uncertainty. Farmers already have enough to worry about given the recent drought and uncertainties surrounding congressional action on the Farm bill.