USDA and the Department of the Treasury announced Thursday that producers applying for farm program payments will now be required to allow the Internal Revenue Service to verify their income.
Starting in the 2009 crop year, in order to be eligible for USDA payments, all recipients will be required to sign a form granting the IRS the authority to provide income information to USDA for verification purposes.
The Farm Service Agency will not receive actual tax data for producers, only information about who does or does not qualify. All disclosure and Privacy Act provisions will be adhered to by USDA.
The new requirement comes in response to an October 2008 Government Accountability Office (GAO) report showing that because USDA does not have proper management controls – such as reviewing tax returns – it could not ensure that payments are made only to qualified individuals.
The GAO found that of the 1.8 million individuals receiving farm payments between 2003 and 2006, more than 2,500 had an average adjusted gross income (AGI) that made them ineligible for farm payments. More than $49 million was paid to ineligible individuals.