Minnesota State Senator Comments on Self-Employment Tax on CRP Payments

I'm writing regarding IRS Notice 2006-108. I would encourage the IRS to not change its treatment of CRP payments as it relates to the Self-Employment Contributions Act.

Those receiving CRP payments who are not actively farming the land have not been subject to the self-employment tax before. The mere act of signing a CRP contract is not enough evidence to claim that a landowner is carrying on in a trade or business. The landowner does not have total control over the use of the land once it is entered into the CRP program. This separates CRP landowners from other types of renters.

The CRP program was established to encourage environmental enhancements. Most landowners do not enter into CRP agreements for the money but instead because they care about conserving our natural resources, By placing an additional tax on these landowners, the IRS would be devaluing the program and placing an undue hardship on farm families. Please reconsider the proposal to tax all CRP land according to the Self-Employment Contributions Act. Thank you for your time and consideration.