Working with IRS since 1955.

The Farmer’s Tax Guide, IRS Publication 225, is written for farmers and their tax advisors.  It may look like a boring, static booklet.  The Farmer’s Tax Guide is not stimulating reading, but it is not static.  Extension people from 14 states work with IRS annually to improve the Guide’s usefulness to farmers.

 Each year, these Extension people review about 3 chapters each.  They read to consider accuracy, readability, new legislation, government programs, terminology, and to make sure the examples are current and realistic.  This year they sent in 117 comments concerning the 86 page Guide.  IRS usually adopts 60-70% of our suggestions.

This year several topics brought quite a bit of discussion.  The definition of a farm is very confusing- mainly because Congress has defined a farm differently in different sections of the Tax Code.  IRS cannot make tax law; they have to work with what Congress gives them.  Separating the home share vs. the farm share of expenses like mortgage interest and insurance premiums can be tedious, but it is supposed to be done.  Some farms now have no land-line telephone but only cell phones, we discussed how and if the home’s share is supposed to be calculated. 

The National Farm Income Tax Extension Committee has been working with IRS on the Farmer’s Tax Guide since 1955.  This year we had Extension people from Colorado, Illinois, Indiana, Kentucky, New York, North Carolina, Ohio, Oklahoma, Utah, Vermont, Virginia, and Wisconsin.  We meet in the main IRS building in Washington DC on the Monday before Memorial Day.  I have served on this Committee for 10 years.  I keep trying to get the words Farmer’s Market and CSA put into the Tax Guide, and get the words Truck Farm out.  The Farmer’s Tax Guide is the first IRS publication to be printed each year, usually very late in October.


About Dennis Kauppila

I work with farmers on finances. I started with UVM Extension in 1983, and have worked with hundreds of farmers on issues ranging from starting a farm, how to get a loan, leasing a farm, understanding farm finances, to retiring from farming. I teach 1 or 2 courses for farmers each winter. I am working with several farmers now on business plans, and I continue to work with many farmers on balance sheets and budgeting.
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