Senate Looking To Help Farmers Dealing With IRS

Last week, the Senate moved to reverse the Supreme Court and make it easier for farmers to save their farms through bankruptcy without the IRS interfering.  The Senate measure, which still needs House approval, clarifies Congress’ intent in 2005 law to let farmers reorganize their finances without the IRS being first in line to get paid.  Bill author Senator Chuck Grassley says the Supreme Court ruled the law failed to achieve Congress’ goal to help family farmers.

“In May 2012, guess what, the Supreme Court stepped in and said, we amended the bankruptcy code, but we didn’t amend the IRS, so the IRS is still standing there in the way of the farmer’s way of reorganization.”

Grassley said too often, when the IRS goes after capital gains, as parts of a farm are sold to pay creditors, there’s no money left to pay other creditors, like the local feed store, forcing loss of the entire farm.  He added this legislative fix is a bipartisan effort.

“Senator Franken and I introduced legislation to amend the current law reversing the Supreme Court ruling.  So, that the farmer can reorganize without the IRS being a block.”

He added the Family Farmer Bankruptcy Clarification Act also removes the IRS’ veto power over a bankruptcy reorganization plan.

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