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Ag Industry Asks IRS Not to Change Cash Accounting Method
USAgNet - 09/23/2019

The National Pork Producers Council was among 28 agriculture associations and businesses which signed a letter to Congress, calling for the repeal of an IRS opinion that threatens the livelihoods of thousands of farm and ranch operations nationwide.

"We are writing today to ask that you protect American farmers' and ranchers' ability to continue to use the cash method of accounting. The vast majority of American farm and ranch businesses use cash accounting to level out the highs and lows of commodity prices and input costs. Cash accounting assures that a farm or ranch business will not be taxed for a sale of agricultural products for which they have not been paid," explained the letter, coordinated by Farmers for Tax Fairness.

In February 2017, IRS issued an Action on Decision letter in response to the IRS' loss in the 5th Circuit Court of Appeals in Burnett Ranches, Ltd. v. U.S. As the letter to Congress this week explained, this ruling places a cloud over thousands of legitimate agricultural businesses and threatens the livelihoods of American farm and ranch families.

It does so by calling into question the accounting methods traditionally used by agriculture and exposing farmers and ranchers to needless litigation with the IRS. "What U.S. pork producers and other farmers don't need right now is more uncertainty," said David Herring, president of NPPC and a pork producer from Lillington, N.C.

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