[Congressional Record Volume 147, Number 21 (Wednesday, February 14, 2001)]
[Extensions of Remarks]
[Page E175]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




INTRODUCTION OF A BILL TO ENSURE THAT INCOME AVERAGING FOR FARMERS NOT 
     INCREASE A FARMER'S LIABILITY FOR THE ALTERNATIVE MINIMUM TAX

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                           HON. WALLY HERGER

                             of california

                    in the house of representatives

                      Wednesday, February 14, 2001

  Mr. HERGER. Mr. Speaker, today I introduce the Farmer Tax Fairness 
Act, along with my Ways and Means Committee colleagues, Representatives 
Thurman, Dunn, and Foley, English, and Camp. This legislation will help 
ensure that farmers have access to tax benefits rightfully owed them.
  As those of us from agricultural areas understand, farmers' income 
often fluctuates from year to year based on unforeseen weather or 
market conditions. Income averaging allows farmers to ride out these 
unpredictable circumstances by spreading out their income over a period 
of years. A few years ago, we acted in a bipartisan manner to make 
income averaging a permanent provision of the tax code. Unfortunately, 
since that time, we have learned that, due to interaction with another 
tax code provision, the Alternative Minimum Tax (AMT), many of our 
nation's farmers have been unfairly denied the benefits of this 
important accounting tool.
  Our legislation directly addresses the concerns being raised by 
farmers using income averaging. Under the Farmer Tax Fairness Act, if a 
farmer's AMT liability is greater than taxes due under the income 
averaging calculation, that farmer would disregard the AMT and pay 
taxes according to the averaging calculation. As such, farmers will be 
able to take full advantage of income averaging as intended by 
Congress.
  This provision is a reasonable measure designed to ensure farmers are 
treated fairly when it comes time to file their taxes. I urge my 
colleagues to join me in promoting greater tax fairness for our 
nation's farmers.

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