By MICHELE F. MIHALJEVICH
Indiana Correspondent

INDIANAPOLIS, Ind. — The USDA’s Farm Service Agency (FSA) and the Internal Revenue Service (IRS) are working together to prevent potential fraud by participants in farm programs.

The partnership with the IRS will make it easier for producers to have their financial compliance with the 2008 farm bill verified, said Carl Schweikhardt, state program specialist in production adjustment with the Indiana FSA office. The partnership, which is nationwide, will also help protect their privacy, he said.

“Instead of producers bringing in their tax forms for the last three years to the county offices, the IRS will check their records,” he said.

“It really takes the burden off the county staffs and the producers.”
Farmers will need to send a consent form to the IRS giving their permission for the agency to search their records and report to the FSA and the Natural Resources Conservation Service (NRCS) on their compliance status, Schweikhardt said.

The forms – CCC-927 for individuals and CCC-928 for other entities – should be sent in by June 15. They are only available at county FSA offices or online, he said.

Once the consent forms are received, the IRS will check their records. Local FSA and NRCS offices will be notified if producers are or aren’t in compliance, but will not see income numbers or any other information, Schweikhardt said.

Farmers who are found to be out of compliance will be ineligible for payments and will be required to refund money they shouldn’t have received. There will be an appeal process, Schweikhardt said.
“I assume most producers will go ahead and fill out the consent forms because they won’t be wanting to give a refund,” he said. “A high percentage will return them. And most of our producers – 99 percent – follow the letter of the law. But it only takes a few out there to give us a black eye. This should tighten any of those loopholes.”

The partnership with the IRS has been discussed for several years, and isn’t the result of a specific problem with fraud or with the current system of verifying that program requirements are met, he said.

The goal is to ensure that only farmers whose three-year average adjusted gross income (AGI) falls below set limits receive payments.

Under the 2008 farm bill, the average AGI limit is $500,000 in non-farm income for disaster and commodity programs, $750,000 in farm income for direct payments and $1 million in non-farm income for conservation programs.

“This new USDA-IRS partnership is intended to help Hoosier farmers meet the requirements in the 2008 farm bill,” said Julia A. Wickard, executive director of Indiana’s FSA office, in a statement. “USDA wants to ensure that the producers who depend upon the safety net of USDA programs will have access to them in the future.”

For more information, contact a local FSA office or go to www.fsa.usda.gov online and click on “Newsroom” at the top of the page, then “Fact sheets” on the right, then the link for “Average adjusted gross income 2009-2012” in the center of the page.