UA Department of Agriculture, USDA team up to inform farmers about tax issues

The University of Arkansas System Division of Agriculture and the U.S. Department of Agriculture are teaming up to provide taxpayer education to farmers and ranchers. The partnership aims to provide resources for educators and tax professionals who work with rural and agricultural clients as well.

The endeavor is part of a $14.5 million investment by USDA’s Farm Service Agency through two outreach efforts — the first to new farmers, and the other to underserved audiences.

USDA announced the partnership Aug. 5.

In the first phase, FSA is investing $10 million toward agriculture-oriented taxpayer education, an effort called the Taxpayer Education and Asset Protection Initiative. The second phase is comprised of a $4.5 million investment in outreach for the Conservation Reserve Program’s Transition Incentives Program, which helps with access to land for beginning and socially disadvantaged farmers and ranchers.

Ron Rainey, assistant vice president of the Division of Agriculture, will be leading the effort to develop a curriculum through the National Farm Income Tax Extension Committee, the nation’s network of Extension Risk Management Centers and other land grant partners. Once developed, there will be a series of sessions to train educators “with the ultimate goal of reaching our farmers and ranchers in all 50 states and U.S. territories,” he said.

Many producers don’t know that USDA program funds they receive for conservation contracts, disaster assistance payments and pandemic relief are taxable income, and need help with short- and long-term business planning associated with their program payments, according to the USDA.

“Many rural areas lack legal and certified accounting services, and agricultural producers need additional knowledge and/or resources to integrate tax planning into their financial planning,” Rainey said. “This partnership will help the Division of Agriculture and USDA work together to overcome inequalities in tax services to serve agriculture communities.”

The next phase of this work will include a suite of online resources for producers, continuing education opportunities for tax attorneys and CPAs, as well as cooperative agreement funding and training opportunities for stakeholder organizations.

“This is the type of effort that goes to the heart of the land grant mission to help our neighbors in the agriculture industry and our rural communities,” said Deacue Fields, who heads the Division of Agriculture. “I appreciate the leadership role Ron Rainey has taken in bringing this effort to life.”

“Running a farm operation is tough, and we are working to help meet gaps where farmers need assistance,” said Deputy Under Secretary for Farm Production and Conservation Gloria Montaño Greene. “First, filing taxes for an agricultural operation can be challenging and many agricultural producers may not have the funds to hire accountants or tax professionals to assist, especially for new and historically underserved producers. This new initiative offers support to producers in navigating tax season.

“Second, we want to make sure producers are aware of our many program options, and Conservation Reserve Program Transition Incentives Program provides a unique opportunity for producers with expiring CRP land to help bring new farmers into the fold,” Greene said.