Proposed IRS Rule Could Help Spur on the Decline of the American Family Farm
By Arizona Farm Bureau Government Relations Manager Anna Kennedy Otto: The Arizona Farm Bureau is comprised of around 2,500 farm and ranch families from all across the state (not counting the 20,005 Arizona farms and ranches the USDA counts overall; over 50% are on tribal lands). As small business owners, many of our members would be negatively impacted by the Internal Revenue Service’s (IRS) proposed
The Dinsmore Farms, Inc., represents a 4th-generation farm in Yuma, Arizona. How will the proposed IRS rule impact them if the 5th generation wants to farm? Arizona Farm Bureau suggests that this new rule will harm families' efforts to transition the farm to the next generation. Photo courtesy Yuma farmer Jonathan Dinsmore.
Arizona Farm Bureau submitted a letter via the Federal Rulemaking portal in opposition to the IRS’s proposed rule.
The National Association of Conservation Districts (NACD) also filed in opposition to the proposed IRS Rule. The NACD has three main concerns that follow:
- Reduce the money farms have available to invest in on-farm conservation practices;
- Compromise the ability of family farms to remain intact after intergenerational transfer; and
- Change the rules and policies that families have known, used, and based their planning decisions on.
Said the NACD Submission: “NACD supports the use of financial assistance to support on-farm investments in conservation. The proposed rule change does precisely the opposite. Rather than freeing up additional money that could be used to implement voluntary conservation, the proposed change would increase the tax burden on farms. The opportunity cost of this tax would be less on-farm conservation and
Additionally, Arizona Farm Bureau understands that tax issues are complex and technical in nature. As members of the American Farm Bureau Federation, we support the technical comments they are submitting to this docket.
The transfer of ownership from one generation to the next is already a burdensome endeavor and should not need to be impacted further by increased estate taxes. The proposed regulations fail to consider the concerns and economic realities of farm and ranch owned businesses and we respectfully request the Treasury Department withdraw the proposed rule.
As highlighted by the United