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Corn+Soybean Digest

Ag Groups Urge Repeal of Burdensome IRS Requirement

National Association of Wheat Growers (NAWG) and more than 25 other agricultural organizations wrote members of the House and Senate last week urging them to support the repeal of new Internal Revenue Service (IRS) reporting requirements that the ag groups say will create an enormous paperwork burden for small businesses.

The requirements stem from a provision in the health care reform law finalized earlier this year that requires businesses to issue an IRS Form 1099 to every unincorporated service-provider they pay more than $600 during a tax year. Starting in 2012, businesses will also have to issue 1099s to incorporated businesses and goods-providers, meaning virtually every business transaction will be covered.

For small businesses like farms and ranches, this provision will dramatically increase the number of 1099s that need to be sent each year, adding to an already formidable stable of paperwork requirements producers must fulfill, which often means hiring someone or spending time away from core business functions.

“The business of producing food, fiber and fuel is a hands-on venture where productivity and competitiveness is compromised by government rules and regulations that turn producers into bookkeepers,” the organizations told House and Senate members. Sens. Mike Johanns (R-NE) and Bill Nelson (D-FL) have offered amendments that could be added to a pending small business bill as early as next week to remedy this situation. To read the full letter sent this week, please visit

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