[Congressional Record Volume 143, Number 8 (Tuesday, January 28, 1997)]
[Senate]
[Page S696]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             FAMILY FARMERS AND THE ALTERNATIVE MINIMUM TAX

  Mr. DORGAN. Mr. President, while the Senator from Iowa is here, I 
wanted to comment on some remarks he made at the start of his 
presentation.
  As the Presiding Officer and other Members may know, Senator Grassley 
and I have cosponsored and introduced last week a piece of legislation 
dealing with this current Internal Revenue Service problem on the 
alternative minimum tax that is going to affect a lot of farmers in our 
part of the country.
  I agree with the Senator from Iowa that the news that came out of the 
Internal Revenue Service this morning is indeed good news. The Internal 
Revenue Service, this morning, has indicated that it will, in effect, 
not enforce in 1996 a provision that it was intending to enforce, which 
we believe is a misinterpretation of tax law. What IRS was intending to 
do, in effect, on the alternative minimum tax was to force a number of 
family farmers to pay taxes on income they have not yet received.
  We do not believe Congress ever intended for that kind of enforcement 
to occur, or for that interpretation of tax law to exist. We think the 
IRS was wrong.
  The Senator from Iowa and I have repeatedly contacted the 
administration. I have visited with the Secretary of the Treasury and 
others to make this case. But, in any event, on a bipartisan basis, as 
the Senator from Iowa and I introduced legislation with 54 cosponsors--
the Republican leader the Democratic leader are on the bill--it is 
clear, or would have been clear, it seems to me, to the IRS and 
Treasury that this legislation will pass in this Congress and in effect 
say to the IRS that your interpretation of the law is wrong.
  I think the IRS has, to its credit, understood now that to enforce in 
this year and put a fair number of farmers at risk--asking them to pay 
taxes on income they have not yet received--would be really a travesty 
of justice. The IRS today has taken the position that they will allow 
farmers to file tax returns in 1996 as they have in the past with 
respect to deferred contract commodity sales. And I commend them for 
taking that position.
  I appreciate the cooperation of the IRS and the Treasury Secretary on 
this issue. It is the right thing to do. It is what the Senator from 
Iowa and I and others have been advocating they do.
  So we have made some incremental progress today. That ought to be 
good news for farmers who have been worried about this issue of how the 
IRS will enforce and treat and audit the deferred contract commodity 
sales.
  I just wanted to follow the remarks of the Senator from Iowa to say 
that I am pleased to work with him on it. It is an example of a 
bipartisan effort to fix a problem, and we have at least gone part of 
the way to fix this problem.

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