The effect is harsh and unfair treatment for America's farmers. Grassley charged that the IRS disregarded important realities in making this determination. They have no control over weather conditions. Use of deferred contracts helps farmers average their income from year to year. Deferring the resulting tax liability for legitimate business reasons is essential.
Family farmers are by statute permitted to manage their businesses on a cash basis.
And amounts received under deferred payment contracts may be properly deferred under this method without AMT liability. The legislation introduced today would amend the Internal Revenue Code of 1986 to provide that installment sales of certain farmers not be treated as a preference item for the purposes of the alternative minimum tax. This bill reaffirms Congressional intent. Simply put, it's the right thing to do. A companion measure was introduced in the House of Representatives by Rep. George Nethercutt of Washington.