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Corn+Soybean Digest

New Adjusted Gross Income Compliance From USDA

USDA recently sent a notice to all local Farm Service Agencies (FSA) explaining the new process for adjusted gross income (AGI) compliance reviews. Under the 2008 Farm Bill, individuals and legal entities with an AGI that exceed the specified limits will be ineligible for certain program payments.

To implement the new compliance process, USDA has secured an agreement with the Internal Revenue Service to develop an electronic information exchange process strictly for the purpose of verifying compliance with the AGI provisions.

Program participants must first certify that they either meet or do not meet the new AGI limitations by completing the Average AGI Statement, Form CCC-926, with their local FSA county office. In addition, individual participants are now required to complete Form CCC-927, which gives written consent to the IRS to provide USDA verification of their average AGI. A legal entity must submit Form CCC-928. Once completed, forms must be sent directly to the IRS at the specified address on the forms.

According to USDA, the IRS process will electronically look at certain line items on tax returns and perform a series of calculations to determine average amounts and then compare these numbers to the average AGI limits. FSA offices will then receive the results with indicators as to whether a participant appears to exceed or fall below the average AGI limit. An individual's actual tax data will not be exchanged or included in the report that is provided back to FSA offices.

The deadline to complete this process is June 15. It is important to note that individuals who do not fill out the form by the deadline will see program payments delayed and may be required to refund 2009 and 2010 program payments.

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