Source: https://www.calt.iastate.edu/blogpost
Timestamp: 2019-10-18 21:42:52
Document Index: 610435070

Matched Legal Cases: ['§ 199', '§ 451', '§199', '§199', '§199', '§199', '§199', '§ 199', '§ 5000', '§ 179', '§ 199', '§1', '§ 199', '§ 162', '§ 1', '§ 199', '§ 657', '§ 263', '§ 505', '§ 179', '§280', '§ 179', '§ 657', '§ 1031', '§ 199', '§ 717', '§ 2704', '§ 170', '§ 170', '§ 614', '§ 201', '§ 562', '§ 24', '§ 24', '§ 6', '§ 479', '§ 6', '§ 650', '§562', '§537', '§562', '§ 523']

Ag Docket | Center for Agricultural Law and Taxation
By: Kristine A. Tidgren September 30, 2019
On September 30, 2019, IRS released proposed regulations clarifying the application of the employer shared responsibility provisions and nondiscrimination rules to individual coverage HRAs, authorized by final regulations issued June 20, 2019 (effective August 19, 2019). The new proposed rules provide safe harbors for applicable large employer (ALEs) who choose to provide individual coverage HRAs to their employees in 2020. These individual coverage HRAs may provide new savings to some...
By: Kristine A. Tidgren September 28, 2019
On September 24, 2019, IRS issued Rev. Proc. 2019-38, the final safe harbor under which a rental real estate enterprise will be treated as a trade or business for purposes of IRC § 199A. This revenue procedure finalizes rules proposed by the IRS on January 18, 2019, in Notice 2019-07. After reviewing comments on the proposed revenue procedure, the IRS and Treasury made few changes when finalizing the guidance. Below is a summary of the final revenue procedure. Language in the final rule that...
By: Kristine A. Tidgren September 26, 2019
On September 26, 2019, the USDA announced that producers participating in the federal crop insurance program who had a 2019 prevented planting indemnity because of flooding or excess moisture will receive an automatic “top-up” payment on their indemnity. Approved Insurance Providers (AIPs) will begin issuing these payments in mid-October. These top-up payments are made possible by the Additional Supplemental Appropriations for Disaster Relief Act of 2019. The top-up payment for producers with...
By: Kristine A. Tidgren September 13, 2019
On Thursday, September 12, 2019, the Environmental Protection Agency and the Department of the Army released a final rule to repeal the embattled 2015 Clean Water Rule, also known as WOTUS. The repeal will be effective 60 days after the rule’s publication in the Federal Register. This repeal finalizes step one of a two-step process the Trump administration began in 2017 to replace the 2015 Rule, which has been the subject of court challenges since its inception. Step two will be to finalize the...
By: Kristine A. Tidgren September 11, 2019
The Seventh Circuit recently ruled that the USDA acted arbitrarily and capriciously when it treated several acres of an Indiana couple’s farm as a converted wetland and rendered their entire farm ineligible for USDA benefits. Boucher v. USDA, No. 16-1654 (7th Cir. 2019). The August 2019 ruling ends a 16-year battle with NRCS that began nearly a decade after a farmer cut down nine trees on his property. In a stinging rebuke, the Court recounted how USDA repeatedly failed to follow applicable...
By: Kristine A. Tidgren August 30, 2019
On August 29, 2019, IRS issued draft instructions for Form 8995, Qualified Business Income Deduction Simplified Computation. The instructions provide some useful soft guidance, as well as a new QBI flowchart. Detailed below are some highlights. We we will watch for the instructions for Form 8995-A. K-1 Items The instructions explain a new reporting category for K-1s: QBI/Qualified PTP Items Subject to Taxpayer-Specific Determinations. The instructions state that these items are not...
By: Kristine A. Tidgren August 25, 2019
As many farmers continue to struggle with high debt and uncertain markets, new attention is focused on remedies for financially distressed farmers. President Trump signed into law the Family Farmer Relief Act of 2019 on August 23, 2019. This law increases the amount of debt a farmer may have, yet still remain a “family farmer” eligible for Chapter 12 bankruptcy protection. The new law raises this threshold from $4,411,400 (indexed for inflation) to $10,000,000. Will New Limit Mean More Filings...
By: Kristine A. Tidgren August 23, 2019
On August 21, 2019, the United States District Court for the Southern District of Georgia became the second federal court in the past three months to rule that the 2015 Waters of the United States Rule (the WOTUS Rule), was improperly issued by the Environmental Protection Agency and the U.S. Army Corps of Engineers. Rather than vacate the rule, the court remanded it to the agencies for further action. This case is Georgia v. Wheeler, No. 2:15-Cv-00079 (S.D. Ga. August 21, 2019). The plaintiffs...
A recent case from the Tax Court explains the special “qualifying child” rule for children of divorced parents. Although it has been in place for decades, the rule still causes confusion, especially among clients. A divorce decree may grant a noncustodial parent the “right” to claim a child as a dependent. Without a signed release, however, the noncustodial parent has no such right. An attached divorce decree is insufficient. Although the Tax Cuts and Jobs Act set the dependency exemption...
By: Kristine A. Tidgren August 1, 2019
IRS unveiled many new draft forms this month. Although these forms are not final, several are worth reviewing. Good-bye Postcard… Although opinions about tax reform vary among tax practitioners, there is one 2018 change that was nearly universally chided. The 2018 Form 1040—while created to showcase a new, “simplified” approach to individual income tax returns—actually led to more attachments, a more cumbersome review process, and numerous tax practitioner complaints. It appears IRS listened (...
Update: President Trump signed this bill into law on August 23,2019. It’s been a long-debated issue, but Congress has now passed a bill to increase the debt limit for Chapter 12 bankruptcy eligibility. On August 1, 2019, the Senate passed the Family Farmer Relief Act of 2019, a brief bill significantly increasing the amount of debt a farmer may have to be considered a “family farmer” eligible for Chapter 12 bankruptcy protection. The bill increases the debt limit to $10,000,000 from the $4,...
By: Kristine A. Tidgren July 25, 2019
On July 25, 2019, USDA published details as to how payments will be made under the 2019 Market Facilitation Program (MFP). First announced May 23, 2019, the 2019 MFP will include up to $14.5 billion in direct payments to producers. Payment details are now posted on the MFP page of the USDA website. Signups for this program will begin Monday, July 29, and end December 6, 2019. Specific application procedures are yet to be posted. The associated rule issued by the Farm Service Agency and...
By: Kristine A. Tidgren June 30, 2019
Generally, cash basis farmers must include proceeds from crop insurance and federal disaster programs in gross income for the tax year during which they receive the payments. IRC § 451(f), however, provides a special deferral provision for insurance proceeds received as a result of “destruction or damage to crops.” Farmers who meet the requirements of the statute may elect to include the proceeds in gross income for the tax year following the destruction or damage. This one-year deferral...
By: Kristine A. Tidgren June 26, 2019
On June 21, the Iowa Supreme Court held that three siblings failed to show that their father was a “vulnerable elder” subject to elder abuse by their brother and nephew. The siblings had argued that the brother and nephew unduly influenced their father to enter into a below-market-rate farmland lease and to gift land to them. The Court, however, ruled that the evidence supported a finding that the 85-year-old father’s number one priority in his estate plan was to maintain the family farming...
By: Kristine A. Tidgren June 21, 2019
A June 18 update posted to the Syngenta settlement claims administration page states that eligible class members will receive notices of determination showing their "compensable recovery quantities" as early as July. This is the number of bushels for which they can recover, not the amount of the payment to which they are entitled. Those claimants who provided insufficient information in their claims are receiving notices of rejection this month. These claimants can respond to the notice with an...
By: Kristine A. Tidgren June 18, 2019
On June 18, 2019, IRS and Treasury issued proposed regulations for the application of IRC §199A to cooperatives and their patrons. These rules were a missing piece of the initial §199A regulatory package. Although the agencies published proposed §199A regulations (REG-107892-18) on August 16, 2018, and final rules (TD 9847) on February 8, 2019, the agencies delayed the issuance of cooperative-specific rules until today. IRS also today posted new questions and answers relating to patrons and...
By: Kristine A. Tidgren June 6, 2019
Disaster Aid Package Signed into Law, Few Details
Update: On June 10, USDA issued this Q & A. President Trump has just signed H.R., 2157, the $19.1 billion disaster relief bill recently passed by Congress. This package should provide much-needed relief for producers most impacted by recent natural disasters. Below is a summary of provisions within this new law. As discussed, a number of questions remain regarding how this aid will be distributed and its potential impact on specific farmers. USDA-Administered The law provides $3,005,442,000...
By: Kristine A. Tidgren May 31, 2019
In a case of significant import to Iowa property owners, the Iowa Supreme Court today ruled that the use of eminent domain for the Dakota Access pipeline was not an unconstitutional taking under either the Iowa or U.S. Constitutions. In Puntenney v. Iowa Utilities Board, No. 17-0423 (Iowa May 31, 2019), the Court also held that the Iowa Utilities Board (Board) acted within its discretion in determining that the pipeline would promote the “public convenience and necessity.” Background This case...
By: Kristine A. Tidgren May 30, 2019
IRS Unveils Draft W-4 for 2020
On May 30, 2019, IRS issued a draft W-4 for the 2020 tax year. This is IRS’ second attempt to unveil a restructured W-4 in light of changes made by the Tax Cuts and Jobs Act. The last attempt, in June of 2018, was met with general disapproval over the amount of personal information taxpayers would be encouraged to disclose to their employers. IRS ultimately withdrew the draft and issued a 2019 W-4 that was much the same as the 2018 form. IRS says that the draft 2020 form is designed to increase...
By: Kristine A. Tidgren May 29, 2019
Texas Court Finds that 2015 Clean Water Rule Violated APA
On May 28, 2019, the United States District Court for the Southern District of Texas determined that the EPA and U.S. Army Corps of Engineers violated the Administrative Procedure Act (APA) when they promulgated the final Clean Water Rule in 2015. This rule—frequently referred to as WOTUS because it defines “waters of the United States” subject to Clean Water Act jurisdiction—has been the subject of litigation since its inception. Rather than vacate the Rule, the Texas court sent it back to the...
By: Kristine A. Tidgren May 28, 2019
Pending Federal Legislation to Watch
Update: On the evening of June 3, 2019, the House passed H.R. 2157, sending the disaster relief bill to the President for his signature. Several bills with general bipartisan support are pending in Congress. These bills, if passed, would impact farmers and ranchers across the country. We will keep you posted as developments unfold. Disaster Relief – H.R. 2157: Additional Supplemental Appropriations for Disaster Relief Act, 2019 Finally passing the Senate on May 23, 2019, H.R. 2157 would provide...
By: Kristine A. Tidgren May 24, 2019
Note: On June 10, USDA issued this Q & A. On May 31, CRS published a report outlining the proposed trade aid package. The USDA announced on May 23, 2019, that there will be a second Market Facilitation Program in 2019. This comes on the heels of the $12 billion MFP program implemented in 2018. The USDA announcement states that the administration is allocating up to $16 billion for the 2019 program, with up to $14.5 billion of that money used for direct payments to producers. These...
By: Kristine A. Tidgren May 21, 2019
On May 21, 2019, IRS issued Rev. Proc. 2019-26, which updated depreciation deduction limits for passenger automobiles purchased after September 27, 2017, and placed into service during 2019. No Bonus Depreciation The revenue procedure specifies that the amount of the depreciation and expensing deduction for a passenger car or light duty truck or van where bonus depreciation is not taken shall not exceed— $10,100 for the 1st taxable year in the recovery period, $16,100 for the 2nd taxable year...
By: Kristine A. Tidgren April 30, 2019
During Iowa’s 2019 Legislative Session that ended Saturday, April 27, legislators passed a number of bills impacting agricultural producers and rural landowners. Below is a review of the highlights. Tax and Estate Planning HF 768 – Beginning Farmer Tax Credit This law would expand and modifies Iowa’s Beginning Farmer Tax Credit Program. For more detailed information on this bill, read this article. Passed: 04/25/2019. Effective retroactively to 01/01/2019. Signed by the Governor on May 21, 2019...
By: Kristine A. Tidgren April 29, 2019
Update: Governor Reynolds signed this bill into law on May 21, 2019. Last week, the Iowa House and Senate passed HF 768, a bill to enhance Iowa’s Beginning Farmer Tax Credit Program. Once signed by the Governor, the new law will strengthen a program that faced significant cuts in 2018. Under the bill, the Iowa Finance Authority may issue up to $12 million in tax credit certificates each tax year, an increase from $6 million under 2018 law. Notably, the $7.9 million in agreements that existed...
By: Kristine A. Tidgren April 26, 2019
May 13, 2019 Update: The Governor has signed the Iowa Hemp Act. The Iowa Legislature has now sent SF 599, the Iowa Hemp Act, to the Governor. Passed by an overwhelming majority, the bill, once signed, would pave the way for future legal production of industrial hemp within the state. This passage, however, is just one in a series of hurdles that must be crossed before growers can legally plant and market industrial hemp within the State of Iowa. Federal Law The Agricultural Improvement Act of...
By: Kitt Tovar April 25, 2019
On April 17, 2019, the Iowa Court of Appeals issued a ruling concerning negligent destruction of a tractor and attachment. The court affirmed the lower courts decisions on all evidentiary issues, but reversed the district court’s decision regarding interest accrual. Background In October of 2015, Jerry went out to his brother’s farm where he stored grain. He parked his pickup over dry corn stalks that stood roughly one-and-one-half feet tall. Because of the lack of rain and high temperatures,...
By: Kristine A. Tidgren April 25, 2019
It’s a fair question. The $1.5 billion Syngenta settlement was approved December 7, 2018, and the settlement agreement specified that payments could issue as early as the second quarter of 2019. Now that we are in that second quarter, do we know when the payments will issue? The answer, unfortunately, is no. The December 7, 2018, settlement approval order specified that one-third of the settlement fund or $503,333,333, would be set aside for attorney fees. A December 31, 2018, order determined...
By: Kitt Tovar April 24, 2019
On April 23, 2019, R-CALF and others filed a lawsuit in the Northern District of Illinois claiming several large packing companies “conspire[ed] to suppress the price of fed cattle they purchased in the United States from at least January 1, 2015 through the present.” The plaintiffs, which consist of Ranchers Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF) and several cattle ranchers, seek class action status, injunctive relief, punitive and triple damages, as well as...
By: Kristine A. Tidgren April 16, 2019
The Iowa Supreme Court recently addressed the question of whether a mechanic’s lien arising from the provision of materials and labor to a tenant can attach to the real property of the landlord where the landlord and the tenant are engaged in a mutually beneficial business arrangement. In Winger Contracting Co. v. Cargill,[i] the Court said that it cannot. Facts Cargill, Inc. entered into a 50-year lease with HF Chlor-Alkali, LLC (HFCA), under which HFCA built a salt conversion plant—which it...
By: Kristine A. Tidgren March 30, 2019
On March 27, 2019, two environmental groups—Iowa Citizens for Community Improvement and Food and Water Watch—filed a petition in state court seeking injunctive and declaratory relief against the State of Iowa, the Department of Natural Resources and others.[i] It’s not the Des Moines Water Works lawsuit, but it is another legal action asserting that agricultural activity has significantly impaired the quality of the Raccoon River. As compared to the Des Moines Water Works lawsuit, however, the...
By: Kristine A. Tidgren March 28, 2019
The United States Justice Department has changed its position and is now supporting the position that the Affordable Care Act (ACA) was rendered unconstitutional when Congress set the individual shared responsibility payment to zero in the 2017 Tax Cuts and Jobs Act. On December 14, 2018, United States District Court Judge Reed O’Connor ruled that when Congress set the individual shared responsibility payment to zero, beginning in 2019, it invalidated the Affordable Care Act in its entirety....
By: Kristine A. Tidgren March 20, 2019
Update: On April 22, 2019, five advocacy groups filed a lawsuit challenging this new law. Iowa has a new agricultural production facility trespass law. This new law—effective March 14, 2019—was passed shortly after a federal district court declared unconstitutional the Iowa Agricultural Production Facility Fraud statute enacted in 2012. These so-called “ag-gag” laws are designed to protect agricultural producers from unauthorized and arguably dangerous intrusion. Opponents contend that these...
By: Kitt Tovar March 14, 2019
On March 14, 2019, the Iowa Governor signed into law a new agricultural production facility trespass statute. Senate File 519, which was passed by the Iowa House and Senate on March 12, makes it a crime to obtain access to or employment with an agricultural production facility by use of deception with the intent to cause “physical or economic harm or other injury.” A person who violates this law is guilty of a serious misdemeanor for the first offense and an aggravated misdemeanor for any...
By: Kristine A. Tidgren March 12, 2019
Governor Has Signed Iowa Bill Allowing $70,000 Section 179 Deduction in 2018 for All
Update: Governor Reynolds signed SF 220 into law on March 15, 2019. It is effective for tax years beginning on or after January 1, 2018, but before January 1, 2019. Late yesterday, the Iowa House passed SF 220 by a vote of 87-7. This followed passage of the bill in the Iowa Senate on February 18, 2019, by a vote of 48-0. The bill now goes to Governor Reynolds for an expected signature. Once enacted, the bill would retroactively expand the 2018 enhanced Section 179 deduction ($70,000) and...
By: Kristine A. Tidgren February 28, 2019
March 1 Triggers Several Farm Lease Questions
Another March 1, the first day of most Iowa farm leases, arrives soon. This post addresses two common questions we've been receiving this month. Nonpayment of Rent My tenant and I signed a written lease for the 2019 crop year. The lease provides that the rent is due, up front, on March 1. It’s March 6 and my tenant hasn’t paid. I am afraid that he does not have the money. What can I do? First, it is important to note that requiring rent up front is a good idea for landlords wishing to minimize...
IDOR announced on February 28, 2019 that it too would grant an extension to the March 1 deadline for farmers and fishermen who did not make estimated tax payments by January 15, 2019. These farmers will have until April 30 to file their Iowa returns and pay their income taxes without incurring estimated tax penalties. The notice states: The Iowa Code and administrative rules allow the Director of Revenue to provide further time for filing returns if good cause exists and to waive penalties for...
It's official. IRS has announced in Notice 2019-17 an extension to the March 1 deadline for farmers who did not make estimated tax payments by January 15, 2019. Under this Notice, farmers have until April 15 (April 17 in Maine or Massachusetts) to file their 2018 returns and pay in full any tax due. The Notice waives the IRC section 6654 penalty for failure to make estimated tax payments for these farmers and fishermen, but the relief must be requested. Farmers and fishermen requesting the...
By: Kristine A. Tidgren February 25, 2019
On February 19, 2019, the United States Supreme Court granted certiorari in a Clean Water Act (CWA) case with far-reaching implications for many industries, including agriculture. The case is Hawai‘i Wildlife Fund v. Cnty. of Maui, 886 F.3d 737 (9th Cir. 2018). The question the Court agreed to answer is: Does the CWA require a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater? In County of Maui, the Ninth Circuit...
By: Kristine A. Tidgren February 17, 2019
Note: On February 28, Senators Grassley and Wyden introduced the "Tax Extender and Disaster Relief Act of 2019," which would revive expired and expiring tax extenders. We will be following this proposed legislation and keep you posted. On February 15, 2019, President Trump signed the Consolidated Appropriations Act, 2019, into law. This new law averted a second government shutdown and funded the IRS through the end of September, 2019. The law did not include any provisions to retroactively...
By: Kristine A. Tidgren February 15, 2019
Update: SF 220 passed the Senate by a vote of 48-0 on February 18, 2019. The bill cleared the House Ways and Means Committee on February 28 and is now waiting for a floor vote. Because next week is funnel week (and other bills need to get out of committee to remain viable for 2019, we may have to wait a while longer for a vote. Read the Iowa Legislative Agency Report about this bill here. In the month since the 2019 Session of Iowa’s 88th General Assembly convened, legislators have...
By: Kristine A. Tidgren January 22, 2019
On January 22, 2019, USDA announced that all FSA offices nationwide would reopen on January 24 to provide additional services to farmers and ranchers during the lapse in federal funding. Full-time hours will be in place through February 8. The agency also announced that the deadline to apply for Market Facilitation Program Payments has been extended to February 14, 2019. Other program deadlines may also be modified. While the government is shut down, FSA staff will work on the following...
By: Kristine A. Tidgren January 20, 2019
On January 18, 2019, Treasury and IRS issued final IRC §199A regulations. Because they were issued in 2019, they are not binding on taxpayers for the 2018 tax year. However, taxpayers may rely on the final rules, in their entirety, or on the proposed regulations issued on August 16, 2018, in their entirety, for taxable years ending in calendar year 2018. The new rules clarify a number of issues, but leave others unresolved. Below are initial highlights from the final rules. No Rules for...
By: Kristine A. Tidgren January 18, 2019
Today, Treasury and IRS issued long-awaited final IRC §199A regulations. In conjunction with these regulations, the agencies also released IRS Notice 2019-07, a proposed revenue procedure to provide a safe harbor under which a rental real estate enterprise will be treated as a trade or business solely for purposes of IRC § 199A. This safe harbor, which includes a 250-hour per year activity requirement, was offered to give taxpayers and their practitioners more certainty with respect to the...
By: Kristine A. Tidgren January 16, 2019
Update: On February 20, 2019, the State of Iowa defendants Governor Reynolds, Attorney General Tom Miller, an Montgomery County Attorney Drew Swanson filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit. Their opening brief will be due April 3, 2019. We will keep you posted! On January 9, 2019, the United States District Court for the Southern District of Iowa declared Iowa’s Agricultural Production Facility Fraud statute to be unconstitutional. Animal Legal...
By: Kristine A. Tidgren January 15, 2019
A new IRS Lapsed Appropriations Contingency Plan released January 15, 2019, states that 57.4 percent of the IRS workforce will be required to work during the Tax Year 2018 filing season as long as a shutdown continues. This compares to 12.5 percent of the 80,265 IRS workers who have been working under the prior (non-filing season) plan. These workers who are "excepted" from furlough will not be paid as long as the shutdown continues. IRS will begin processing individual returns January 28. The...
By: Kristine A. Tidgren January 4, 2019
Update: Late January 7, 2019, IRS announced that it would begin processing individual returns on January 28, 2019. The announcement also stated that IRS would be paying refunds, even if a government shutdown continues. Citing 31 U.S.C. 1324, the announcement stated that Congress has given IRS authority to pay refunds, despite lapses in annual appropriations. The notice stated that the agency would be issuing an updated Lapsed Appropriations Contingency Plan in the coming days that would include...
By: Kristine A. Tidgren December 31, 2018
On this, the last day of 2018, we look back at key agricultural and taxation developments from the past year. Many of these issues continue to significantly impact agricultural producers, and we will continue to monitor these evolving issues as we head into 2019. Happy New Year! 1. Tax Cuts & Jobs Act significantly changes tax rules for agricultural producers. The most sweeping legal change applying to most agricultural producers in 2018 has been the implementation of the Tax Cuts &...
By: Kristine A. Tidgren December 30, 2018
The Tax Cuts and Jobs Act modified IRC § 5000A(c) to set the individual shared responsibility payment to 0 for months beginning after December 31, 2018. This means that, beginning in 2019, individuals will no longer be subject to a penalty tax when they do not have Affordable Care Act (ACA) compliant health insurance. Because so many taxpayers already avoided the penalty because of affordability, hardship, religious, and other exemptions, the actual impact this change will have on the...
By: Kristine A. Tidgren December 19, 2018
The grain glitch and the fix to the grain glitch were big news during the first quarter of 2018. Then the excitement subsided. But now with filing season approaching for the 2018 tax year, it’s important for producers and their tax advisors to review what the new law means for income received from transactions with agricultural and horticultural cooperatives in 2018, particularly the less-discussed transition rule. Transition Rule The grain glitch fix is complicated and creates a separate...
By: Kristine A. Tidgren December 18, 2018
On December 17, 2018, the USDA announced that President Trump had authorized the second round of market facilitation program payments (MFP) to be made. The payment will be issued based upon the remaining 50 percent of total production, multiplied by the MFP rates for the commodity: What Must Producers Do? Anyone who has already submitted an MFP application, completed harvest, and certified their 2018 production does not have to do anything else. The second payment will simply issue. For...
By: Kristine A. Tidgren December 15, 2018
President Trump signed the 2018 Farm Bill into law on December 20, 2018. The Agricultural Improvement Act of 2018, generally referred to as the 2018 Farm Bill, cleared Congress this week and has now been sent to the President for an expected signature. The final bill stems from the work of a conference committee convened to reconcile differences between Senate and House versions passed earlier this year. The final bill is a compromise, prompted by the need to implement programs to assist...
By: Kristine A. Tidgren December 14, 2018
On December 11, 2018, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers proposed a revised definition for “waters of the United States” or WOTUS. This definition, if finalized, would determine which waters are subject to the jurisdiction of the federal Clean Water Act. As proposed, the rule would significantly narrow the scope of WOTUS, particularly in comparison to the 2015 Clean Water Rule. Background WOTUS has been the subject of litigation and controversy since...
By: Kristine A. Tidgren November 23, 2018
A recent case from the Iowa Court of Appeals assesses the impact of a below-market-value purchase on the priority of related security interests in farm equipment. It’s a timely review during this current farm downturn. Background A private lender made loans to a farmer and his business entities for the purpose of financing his farming operation. The parties executed security agreements for the transactions to secure all present and future debts owed to the lender. The lender had a blanket...
By: Kristine A. Tidgren November 21, 2018
On November 20, 2018, IRS issued a proposed rule providing that individuals who make gifts while the basic exclusion amount (BEA) is temporarily doubled will get to take full advantage of that increased BEA for those gifts, even if the BEA is lower at the time the donor dies. In other words, the proposed regulations would eliminate a so-called “clawback.” The regulations would be effective after publication of a Treasury decision adopting them as final. Background The Tax Cuts & Jobs Act...
By: Kristine A. Tidgren November 7, 2018
On November 7, 2018, Treasury issued final regulations to implement new due diligence requirements applying to tax return preparers making head of household eligibility determinations for their clients. The final regulations largely track the proposed regulations, which were issued July 18. They do clarify, however, that a preparer cannot rely on pre-existing knowledge acquired outside of a tax preparation engagement to meet the due diligence requirement. The regulations also affirm the...
By: Kristine A. Tidgren October 31, 2018
For tax year 2018, Iowa has coupled only with selected federal changes. With those exceptions, Iowa tax law looks to the Internal Revenue Code as it existed on January 1, 2015. This non-conformity has presented some challenges. Recently, the Iowa Department of Revenue issued guidance on several provisions that have created the greatest number of questions. Yesterday, the Department also issued its 2019 tables for income tax brackets, interest rates, and standard deductions. This article...
By: Kristine A. Tidgren October 26, 2018
Newly published proposed regulations from the U.S. Departments of Treasury, Health and Human Services, and Labor, if implemented, would significantly change the landscape in the healthcare market, reinstating (in new form) some health care reimbursement options that existed prior to the Affordable Care Act. Not intended to be effective until final regulations are issued and not before 2020, the proposed rules seek to implement President Trump’s October 12, 2017, Executive Order 13813, which...
By: Kristine A. Tidgren October 19, 2018
As tough times continue in the farm sector, more farmers are calling it quits. In particular, many operators who do not own ground and are dependent upon renting the land of others are struggling to hold on. Many are selling farm assets and securing full-time off-farm employment to make ends meet. It’s a quiet exodus, but it comes with hidden danger. Liquidating assets without a careful plan can generate tax consequences that will impair any hope for a fresh start down the road. As farmers...
By: Kristine A. Tidgren October 5, 2018
A recent summary opinion from the tax court illustrates a real danger of the advance premium tax credit for taxpayers who may end the year with more income than they expected. The result in this case was especially harsh since the unexpected income flowed from assets the couple liquidated to pay living expenses and their son’s college tuition while the husband battled terminal cancer. Background A husband and wife filed a joint return in 2014, claiming their son, who was a college student, as...
By: Kristine A. Tidgren October 3, 2018
On October 3, 2018, IRS issued Notice 2018-76, which was welcome news for many business owners. The Notice provides transitional guidance on the deductibility of business meal expenses in light of the Tax Cuts & Jobs Act's disallowance of deductions for entertainment expenses. Many were concerned that the disallowance would extend to many client (or potential client) business meals, but the Notice, which may be relied upon until proposed regulations are published, clarifies that most...
By: Kristine A. Tidgren September 30, 2018
Last week, the Iowa Department of Revenue issued proposed rules for implementing changes to section 179, brought about by Iowa’s 2018 tax reform legislation (S.F. 2417, enacted May 30, 2018). The rules are open for public comment through October 17, 2018. Individual Taxpayers and Pass-through Entities General Rules Taxpayers electing to expense assets under federal IRC § 179 must also expense those assets for Iowa purposes. Likewise, taxpayers who do not take the federal section 179 expense...
By: Kristine A. Tidgren September 12, 2018
Just when many thought the 2015 Clean Water Rule or “WOTUS” was relegated to the archives of history, it has been revived. In fact, as of mid-September 2018, WOTUS is the controlling definition for “waters of the United States” in 22 states. As of September 18, 2018, Iowa was no longer among them. And the status for the remaining states could change at any time. The saga—a case study on the intricacies of administrative law—is far from over. In the meantime, landowners planning activities...
By: Kristine A. Tidgren August 31, 2018
On August 27, 2018, Secretary of Agriculture Sonny Perdue announced details of new programs designed to assist farmers in response to ongoing trade disputes. USDA will authorize $12 billion for three primary programs: FSA will administer the new Market Facilitation Program to provide payments to corn, cotton, dairy, hog, sorghum, soybean, and wheat producers, beginning as early as September 4, 2018. The Agricultural Marketing Service will administer the Food Purchase and Distribution Program to...
By: Kristine A. Tidgren August 30, 2018
It is generally advisable for business owners to form a separate legal entity to limit personal liability stemming from business contracts or torts. Incorporating or organizing as an LLC can limit owners’ personal liability to the extent of their investments. This liability shield, however, is not without exception. In a recent case from the Iowa Court of Appeals, a plaintiff was able to “pierce the corporate veil” in an attempt to collect on a $410,067 breach of contract judgment. The case...
By: Kristine A. Tidgren August 13, 2018
Highlights from the 199A Proposed Regulations
Treasury and the IRS released IRC § 199A proposed regulations, REG-107892-18, on August 8, 2018. The regulations will not officially apply until they are adopted as final; however, taxpayers can rely on §§1.199A-1 through 1.199A-6 until final rules are adopted. Following is a summary of significant highlights from the proposed regulations. More detailed analysis will follow in the days ahead. The estimated total annual reporting burden for the proposed regulations is 25 million hours. (Preamble...
Treasury and the IRS released IRC § 199A proposed regulations, REG-107892-18, on August 8, 2018. These are proposed regulations, but taxpayers can rely on them until final rules are adopted. The proposed regulations define “trade or business” as an IRC § 162 trade or business (other than the trade or business of performing services as an employee). (Proposed § 1.199A-1(b)(13)). They do not provide bright-line standards or a safe harbor regarding this definition. This leaves many questions...
By: Kristine A. Tidgren July 31, 2018
Guidance is Trickling in, but Nothing Big Yet
We’ve been patiently (or maybe not so patiently!) awaiting guidance for many of the key provisions in the Tax Cuts & Jobs Act for months now. As July turns to August, we continue the wait. Of course, IRC § 199A is perhaps the provision that presents the most planning opportunities for many businesses of all sizes. But without guidance for 199A, which provides a 20 percent deduction for “qualified business income” from a “qualified trade or business,” we’re left scratching our heads when it...
By: Kristine A. Tidgren July 27, 2018
Iowa Court Upholds Intentional Interference with a Bequest Judgment
On July 18, 2018, the Iowa Court of Appeals affirmed a trial court judgment declaring a testator’s will invalid on the grounds of lack of testamentary capacity and undue influence and finding her son liable for intentional tortious interference with a bequest. This case again highlights a tort that made news last year when a brother won $1.5 million in damages against his sisters for turning their parents against him. Background The testator had three children, two sons and a daughter. She died...
By: Kristine A. Tidgren July 10, 2018
The Senate and the House have passed their respective versions of the 2018 farm bill. The Senate passed its bill by a vote of 86-11 on June 28, 2018, and the House passed its more partisan bill by a vote of 213 – 211 on June 21. Now, the debate moves to conference committee, where significant differences between the bills must be resolved. It is not clear how long this process may take. Although the Senate cancelled its usual August recess, the House will adjourn, and Congress has a tough fall...
By: Kristine A. Tidgren July 6, 2018
Many laws passed during the 2018 Iowa Legislative Session impact agricultural producers and landowners. A number of these laws went into effect July 1, 2018. Following is a summary of the highlights. Agriculture-Specific Law Fence Law Revisions (HF 2340). This law requires fence viewers to disclose potential conflicts of interest and provides for disqualification based upon an actual conflict. If a fence viewer is disqualified, the law provides that the remaining township trustees will appoint...
By: Kristine A. Tidgren June 29, 2018
IRS officially unveiled its draft 2018 Form 1040 today, stating that it will work with the tax community to finalize the form over the summer. The new Form is part of the IRS effort “to streamline the Form 1040 into a shorter, simpler form for the 2019 tax season.” The IRS announcement—directed at tax professionals—stated, “The new 1040 – about half the size of the current version -- would replace the current Form 1040 as well as the Form 1040A and the Form 1040EZ.” The announcement continued...
By: Kristine A. Tidgren June 23, 2018
Iowa’s agricultural nuisance law has perhaps become a little clearer, albeit no simpler to apply. On Friday, June 22, 2018, the Iowa Supreme Court issued a key ruling analyzing the constitutionality of Iowa’s embattled right-to-farm statute, Iowa Code § 657.11(2). Honomichl v. Valley View Swine, LLC, No. 16-1006 (Iowa June 22, 2018). In reversing a district court order finding the statute unconstitutional, as applied to plaintiffs living near two swine feeding operations, the Court re-affirmed...
By: Kristine A. Tidgren June 20, 2018
Today, the Iowa Court of Appeals ruled that two shareholders of a family farming corporation did not prove their claim of minority shareholder oppression. In making its ruling, the court relied upon the Iowa Supreme Court’s holding in Baur v. Baur Farms, Inc., 832 N.W.2d 663, 668 (Iowa 2013), which defined the applicable standard of proof as follows: "Majority shareholders act oppressively when, having the corporate financial resources to do so, they fail to satisfy the reasonable expectations...
By: Kristine A. Tidgren May 31, 2018
The Tax Cuts and Jobs Act contains a number of provisions that apparently do not accord with legislative intent. This is, in some cases, evidenced through discrepancies between the committee report and the language in the code. Today, we will highlight two apparent errors with significant impact to many taxpayers. The technical correction process is underway; however, it remains to be seen whether those changes will make it through Congress. Qualified Improvement Property The TCJA eliminated...
By: Kristine A. Tidgren May 30, 2018
Note: The Iowa Department of Revenue has launched a new webpage, where it will be publishing its latest guidance and information on the new Iowa law. On May 5, 2018, the Iowa Legislature passed S.F. 2417, a significant overhaul of the Iowa tax code. Federal tax reform implemented by the Tax Cuts & Jobs Act set the stage for this legislation. Following is a review of key provisions included in the bill that Governor Reynolds signed into law on May 30, 2018. Tax Year 2018 Highlights The law...
By: Kristine A. Tidgren May 24, 2018
Generally, the uniform capitalization rules (UNICAP) have required all farmers, regardless of size, to capitalize pre-productive costs of plants that have a pre-productive period of more than 2 years. IRC§ 263A(a)(1), (d)(1)(A)(ii). Pre-productive costs are the costs of raising plants after they are planted and before they are placed in service, including those associated with management, irrigation, fertilizing, depreciation, & repairs on buildings and equipment. Whether a plant has a pre-...
By: Kristine A. Tidgren April 30, 2018
Update: On September 24, 2018, the United States Court of Appeals for the Sixth Circuit held that the Clean Water Act does not apply to pollutants that travel through groundwater before entering navigable waters. Tenn. Clean Water Network, et al. v. TVA , No. 17-6155 (6th Cir. Sept. 24, 2018); Ky. Waterways Alliance v. Kentucky Util. Co., No. 18-5115 (6th Cir. Sept. 24, 2018). On April 12, 2018, the United States Court of Appeals for the Fourth Circuit vacated a district court’s judgment and...
By: Kristine A. Tidgren April 25, 2018
An entirely renovated Iowa partition law will go into effect on July 1, 2018. On April 11, 2018, Governor Reynolds signed SF 2175 into law. This new law reorganizes and replaces the current Iowa Code chapter 651 and integrates many provisions from the Iowa Rules of Civil Procedure (Division XII), which currently govern partition actions in Iowa. Notably, SF 2175 creates a new partition procedure for “heirs property.” It also authorizes the equitable remedy of “owelty,” a payment of money...
By: Kristine A. Tidgren April 12, 2018
Corn Farmers May Begin Filing Claims in Syngenta Settlement May 11
Judge Lungstrum granted preliminary approval for the $1.51 billion Syngenta settlement on April 10, 2018. This means that formal notice (sample here) will be mailed to class members on May 11, 2018, at which time the formal claims process will begin. Corn producers and landlords who are members of the class will be able to go online to www.cornseedsettlement.com to file their claims. If they do not have internet access, they will be able to call 1-833-567-2676 to request a paper claim form (...
By: Kristine A. Tidgren March 30, 2018
On April 2, 2018, Governor Reynolds signed SF 2349, into law. The new law is designed to address the mounting difficulties faced by many Iowans seeking to purchase health insurance on the individual market. Specifically, the law will provide two new healthcare benefit options for small employers and sole proprietors, the groups most impacted by Iowa’s healthcare crisis (for past analysis of this problem, click here). New “Health Benefit Plans” The law first creates Iowa Code § 505.20, a...
By: Kristine A. Tidgren March 23, 2018
Update: On May 2, the D.C. Circuit Court of Appeals issued the mandate vacating the 2008 final rule. The Consolidated Appropriations Act, 2018 (Omnibus Bill), signed into law, on March 23, 2018, has exempted the reporting of "air emissions from animal waste at a farm" under CERCLA. This exemption is included in Title XI of the Act, called the “Fair Agricultural Reporting Method Act” or “FARM Act." This exemption was enacted because of a decision on April 11, 2017, by the United States Court of...
By: Kristine A. Tidgren March 22, 2018
"Fix" to Grain Glitch is Now Law - Examples Included
President Trump signed the Consolidated Appropriations Act, 2018, H.R. 1625, on March 23, 2018. At the end of the 2,232-page legislation, Congress included a section written to “fix” the “grain glitch.” This is, of course, the provision in the Tax Cuts and Jobs Act that provided significantly higher tax deductions (in most cases) to patrons who sold commodities to cooperatives rather than to non-cooperatives. You can read more detail about the original provision here. The 17-page “fix,” while...
By: Kristine A. Tidgren March 13, 2018
Yesterday, plaintiffs filed a motion asking for preliminary approval of a settlement reached with Syngenta. The proposed settlement, which would comprise $1.51 billion, is described by plaintiffs’ counsel in a court filing as a “record-breaking achievement in agricultural litigation, the largest-ever GMO settlement in the United States.” If approved and consummated, the proposed settlement would dispose of nearly all claims that were or could have been filed against Syngenta stemming from its...
By: Kristine A. Tidgren March 11, 2018
Last fall, we wrote about the health care crisis facing many Iowa farmers and other small business owners. Many of those with incomes above 400 percent of the federal poverty limit faced 2018 health care insurance premiums surpassing $30,000 per year on the individual market. Consequently, many have been left with few options in 2018. As of February 13, 2018, the Iowa Insurance Division reported that only 46,563 Iowans had enrolled in coverage through ACA-compliant individual policies for 2018...
By: Kristine A. Tidgren February 28, 2018
The Tax Cuts and Jobs Act has significantly changed the tax landscape for agricultural producers. We’ve detailed a number of the changes, many of them positive, in prior articles. In light of the federal changes, Iowa must now decide how to respond. As Iowa lawmakers turn their attention to tax reform, we review several key IRC § 179 issues with great impact to Iowa agriculture and suggest they warrant attention, especially a glitch in the law that can deny owners of certain pass through...
By: Kristine A. Tidgren February 25, 2018
The Tax Cuts and Jobs Act (TCJA) made significant changes impacting the depreciation and expensing of vehicles used in a trade or business.[i] In this post, we review the current law. 2017 Limits for "Passenger Automobiles" IRC §280F(a) imposes dollar limitations on the depreciation and IRC § 179 expensing deductions that can be taken for passenger automobiles. This limitation is often referred to as the “luxury automobile depreciation limitation,” even though it applies to vehicles not...
By: Kristine A. Tidgren February 23, 2018
The Iowa Court of Appeals recently found that Fayette County improperly granted permits to a wind energy group to build three wind turbines on agricultural land. This opinion leaves in effect a district court order that directed the group to remove the turbines. A Fayette County couple granted easements to several wind development companies to construct three wind turbines on their farmland. The wind group applied to the Fayette County Board of Adjustment (Board) for special use permits to...
By: Kristine A. Tidgren February 22, 2018
A case that has again found its way to the Iowa Court of Appeals could give the Iowa Supreme Court another opportunity to refine the doctrine of promissory estoppel. A farmer claimed that his neighbor granted him an oral option to purchase his farm for approximately $3,000 an acre at an unspecified time in the future. The farmer leased the property and made substantial improvements, which he alleged were consideration for the option agreement. When the neighbor sold the farm to a third party,...
By: Kristine A. Tidgren February 20, 2018
On February 12, 2018, the Iowa Supreme Court heard oral arguments in a case that will shape Iowa nuisance law, as it applies to animal feeding operations. The Court will again analyze Iowa Code § 657.11, which was enacted in 1995 to protect agricultural producers “who manage their operations according to state and federal requirements from the costs of defending nuisance suits.” This will be the third time Iowa’s highest court has assessed the constitutionality of a statute protecting...
By: Kristine A. Tidgren February 11, 2018
President Trump signed the Bipartisan Budget Act of 2018 into law on February 9. The Act, which was passed to fund the federal government and avoid another shutdown, includes a number of changes to the Internal Revenue Code. Many of these changes retroactively extend--generally for one year--tax provisions which had expired at the end of 2016. Because this Act significantly impacts many 2017 returns, IRS announced on Friday that it was reviewing the legislation and would provide additional...
By: Kristine A. Tidgren January 26, 2018
Water Quality Funding Bill Awaits Governor Reynolds' Signature
Update: Governor Reynolds signed SF 512 into law on January 31, 2018. On January 23, 2018, the Iowa House finished work that was started last year by the Iowa Senate by passing a new water quality funding bill by a vote of 59-41. SF 512, which was passed by the Iowa Senate last April, is now awaiting the signature of Governor Reynolds. She has publicly supported the legislation and has stated that she will announce a signing ceremony “at a later date.” The legislation provides $282 million over...
By: Kristine A. Tidgren January 16, 2018
The Tax Cuts and Jobs Act preserved like-kind exchange treatment for real property, but eliminated it for personal property. Today, we take an initial look at what that means for farmers or other taxpayers looking to trade equipment or livestock in 2018. We will soon write separately about vehicle depreciation and trades in light of the new law. Pre-Tax Cuts and Jobs Act Law Under 2017 law, IRC § 1031 non-recognition treatment was mandatory for a qualifying exchange of personal property. Those...
By: Kristine A. Tidgren January 12, 2018
Iowa law has been clear, and it is perhaps even more clear today. Unlike most other states, Iowa is “unequivocal in favoring partition by sale." Newhall v. Roll, 888 N.W.2d 636, 640 (Iowa 2016). In December of 2016, the Iowa Supreme Court issued an opinion reversing a partition in kind and ordering the property sold. In Newhall, the Court reviewed Iowa law, stating that under Iowa R. Civ. P. 1.1201(2), the party seeking a partition in kind has the burden to prove it would be both equitable and...
By: Kristine A. Tidgren January 8, 2018
Update: A "grain glitch" "fix" was signed into law on March 23. Read about it here. ------------------------------------------------------------------------------- The Tax Cuts and Jobs Act lowers the corporate income tax rate from a maximum rate of 35 percent to a flat rate of 21 percent. To ensure that other businesses weren’t left without a break, the Act also creates a new deduction, IRC § 199A, to apply to income earned from other business activities. The new deduction impacts millions...
By: Kristine A. Tidgren December 29, 2017
As the year concludes, we’re taking some time to review the most significant happenings in agricultural law and taxation in 2017. Some closed chapters on drawn-out litigation or administrative action. Others signal the beginning of much more activity to come. In any event, 2017 did not disappoint in terms of lots to discuss. We review these highlights below, in no particular order. And we’ll continue to keep you posted as the calendar rolls ahead to 2018. Happy new year! Clean Water Rule...
By: Kristine A. Tidgren December 27, 2017
On March 23, 2018, President Trump signed the Consolidated Appropriations Act, 2018, into law. Title XI of this Act, the “Fair Agricultural Reporting Method Act” (“FARM Act”) exempts the reporting of “air emissions from animal waste at a farm” under CERCLA. On April 11, 2017, the United States Court of Appeals for the District of Columbia vacated an EPA final rule that had been in place for nine years. The rule—called the CERCLA/EPCRA Administrative Reporting Exemption for Air Releases of...
By: Kristine A. Tidgren December 21, 2017
We told you last April about changes that would come to the Iowa Beginning Farmer Tax Credit program in 2018, absent legislation. Because those legislative changes did not occur, cuts to the program are now being felt by beginning farmers and landlords around Iowa. In 2009, the Iowa Legislature placed a cap of $6 million on the value of beginning farmer credits that could be awarded in Iowa. When it created the custom farming contract tax credit (CFTC) in 2013, the Legislature increased this...
By: Kristine A. Tidgren December 20, 2017
Update: President Trump signed H.R.1 into law on December 22, 2017. After some procedural drama, Congress passed sweeping new tax legislation on December 20, 2017. On December 19, 2017, the House passed H.R.1 by a vote of 227-203. In the early morning hours of December 20, 2017, the Senate passed H.R.1 by a vote of 51-48, but only after making several technical amendments to provisions the Senate parliamentarian adjudged violative of the Byrd Rule. One change eliminated the provision allowing...
By: Kristine A. Tidgren December 7, 2017
The Iowa Court of Appeals recently affirmed a judgment in favor of a borrower, against his banker, for claims of fraudulent misrepresentation and nondisclosure. The testimony of three players—the borrower, the banker, and a financially struggling customer—painted three wholly different pictures. In the end, however, a jury believed the borrower, finding that the banker and the financially struggling customer--once a friend of the borrower--had worked together to defraud the borrower. In a...
By: Kristine A. Tidgren December 2, 2017
Update: The conference committee released its report on December 15, 2017. Congress will vote on this final bill next week. Read our summary of the final bill here. In the early hours of this morning (December 2), the Senate passed landmark tax legislation which, if enacted into law, will impact every individual and business in America. The vote on H.R.1, the Tax Reconciliation Act, remained on party lines, 51-49. One Republican, Sen. Bob Corker of Tennessee, voted against passage of the bill....
By: Kristine A. Tidgren November 24, 2017
QSEHRA Guidance Clarifies that Plans May Not Benefit All Employees
On October 31, the IRS issued Notice 2017-67, detailing requirements for the qualified small employer health reimbursement arrangements (QSEHRAs) implemented last December by the 21st Century Cures Act. The law removes from the definition of “group health plan” reimbursement arrangements that follow the law’s requirements. Removing such plans from the definition of “group health plan” means exempting them from the requirements of Affordable Care Act's market reforms, including the “no annual...
By: Kristine A. Tidgren November 21, 2017
Update: The House of Representatives passed H.R. 1 on November 16 by a vote of 227-205. Later that day, the Chairman's Mark cleared the Senate Finance Committee by a vote of 14-12. The Senate legislative text has been released here. House Republicans released their detailed tax reform proposals on November 2. On November 9, an amended version of H.R. 1, the Tax Cuts and Jobs Act, passed out of the House Ways & Means Committee by a vote of 24-16. The bill will move to a vote on the House...
By: Kristine A. Tidgren November 5, 2017
House Tax Reform Proposal and Pass-Through Entities: Our First Read
Note: These provisions have been significantly modified by the Chairman's second amendment. In particular, the SE tax modifications have all been removed in the Bill that passed out of the Committee. A lower bottom threshold rate was also added for small pass-through businesses. Read new summary of current proposals here. The 429-page tax reform proposal released by the House on Thursday is touted as simplifying the tax code. Not surprisingly, there’s very little simple about it, especially...
By: Kristine A. Tidgren October 30, 2017
Background Many farmers and other self-employed Iowans not eligible for Medicare or Medicaid have few choices when it comes to 2018 health insurance. Last week, due to a lack of federal response, Iowa officials withdrew their proposed Stopgap proposal. They submitted the waiver application in an attempt to prop up Iowa’s individual insurance market in the face of skyrocketing premiums. It was hoped that the measure would stabilize the individual market through "innovative solutions." With that...
By: Kristine A. Tidgren October 25, 2017
A case from the Iowa Court of Appeals today illustrates the operation of the Iowa fence law. If they receive a written request from their neighbor, adjoining landowners are required to contribute half of the cost to maintain a partition fence, even when they don’t want to. A resistant landowner found that out the hard way. The parties were adjacent landowners. A 600-foot partition fence separated their properties. The defendant raised cattle and had always maintained the west 300-feet of the...
Update: On October 26, 2017, President Trump signed this bill into law. On October 24, 2017, The Family Farmer Bankruptcy Clarification Act of 2017, received final Congressional approval and was sent to the President for his signature. This provision was part of a larger bill, the H.R.2266 - Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2017, including the Bankruptcy Judgeship Act of 2017. The Bankruptcy Judgeship Act allows for the appointment of new bankruptcy...
By: Kristine A. Tidgren October 18, 2017
It was not unexpected. In 2012, the Iowa Legislature passed and Governor Branstad signed Iowa Code § 717A.3A. This legislation, titled Agricultural Production Facility Fraud, has been called Iowa’s “Ag-Gag” law. It’s a law specifically protecting animal production facilities from unauthorized intrusion. But since the law’s passage, opponents have vowed to challenge its constitutionality on First Amendment grounds. That challenge was brought on October 10, 2017, with a lawsuit filed in the...
By: Kristine A. Tidgren October 17, 2017
Update: IRS formally withdrew these proposed regulations (REG 163113-02) in FR Doc. 2017-2776, filed October 17, 2017, for publication on October 20, 2017. The following was orginally published on October 4, 2017: On August 2, 2016, IRS proposed regulations under IRC § 2704 (Restrictions on Liquidation of an Interest for Estate, Gift and Generation-Skipping Transfer Taxes (REG-163113-02)) that were met with swift criticism. These proposed regulations sought to restrict valuation discounts long...
By: Kristine A. Tidgren September 29, 2017
First there was the Blueprint, then the Bullet Points, and now the “Framework.”[i] On September 27, the White House, the House Committee on Ways and Means, and the Senate Committee on Finance made public an outline of their proposals for long-awaited tax reform. While accompanied by fanfare and superlatives, the new Framework provides no more detail than earlier outlines. Consequently, it’s impossible to predict who would win or lose or stay the same under any future tax reform. The...
By: Kristine A. Tidgren September 28, 2017
On September 27, the U.S. Tax Court ruled that a Texas farm couple was not liable to pay self-employment tax on rents they received from the S corporation through which they conducted a poultry growing operation. The decision in Martin v. Commissioner, 149 T.C. 12 (Sept. 27, 2017), adopted the analysis of McNamara v. Commissioner, 236 F.3d 410 (8th Cir. 2000), and comes 14 years after the IRS announced its non-acquiescence[i] with that key 8th Circuit case. Background The taxpayers, who were...
By: Kristine A. Tidgren September 26, 2017
It was announced on September 26, 2017, that Syngenta agreed to settle claims brought against it by U.S. farmers on account of its allegely premature marketing of Viptera and Duracade GMO corn. These claims include those in the Syngenta MIR 162 Corn Litigation, as well as those in the class action in Minnesota state court. The initial settlement agreement was reached in the middle of a multi-week trial occurring in Hennepin County District Court in Minnesota. This trial involved more than 20,...
By: Kristine A. Tidgren September 14, 2017
Update: On October 13, 2017, the EPA announced an agreement with Monsanto, BASF, and Dupont regarding measures to minimize damage from dicamba drift. Read the press release here. As the reports of damages stemming from dicamba drift increase, questions swirl. Just what is the problem? Who’s responsible? What can be done to prevent future damage? While there are no clear answers to many of these questions, it may be useful to review the general legal principles that apply to herbicide drift and...
By: Kristine A. Tidgren September 13, 2017
Update: On February 23, 2018, the Iowa Supreme Court vacated this Court of Appeals decision and reinstated the district court's judgment. Can a family settlement agreement (FSA) govern the imposition of inheritance tax liability? Under the right set of circumstances, yes. After a recent case, the answer to that question in Iowa appears to turn on whether the FSA seeks to avoid tax or to reach a compromise as to an alleged wrong that created the tax liability in the first place. In this case,...
The Iowa Court of Appeals recently affirmed a jury verdict awarding a plaintiff $70,100 after her neighbor built a trail encroaching upon her property. The damages included $50,000 for trespass and loss of lateral support and $20,100 in treble damages for the loss of trees. The jury found the neighbor 75 percent responsible for the damage and his contractor 25 percent responsible. The case should remind landowners and contractors to conduct a survey before engaging in any construction or...
By: Kristine A. Tidgren September 12, 2017
A recent case out of the tax court ruled that IRS had the power to examine the estate tax return of a predeceased spouse for the purpose of lowering the DSUE (deceased spousal unused exclusion) claimed by the second-to-die spouse’s estate. The tax court opinion stands for the proposition that there is no limit to the number of years the IRS can go back to review (and correct) a DSUE reported by the estate of the spouse who died first. This lends a bit of uncertainty to the benefit of...
By: Kristine A. Tidgren August 25, 2017
IRS’ Office of Chief Counsel recently weighed in on an important question for small partnerships: Are they automatically exempted from the requirement of filing a Form 1065, U.S. Return of Partnership Income, because of Rev. Proc. 84-35, 1984-1 C.B. 509? Simply put, the answer was, “No.” The conclusion of the CCA 201733013 was not a surprise, especially in light of the 2015 case of Battle Flat, LLC v. United States[i], and Internal Revenue Manual procedures detailing the requirements for...
By: Kristine A. Tidgren August 23, 2017
Time is running out to avoid automatic renewal of a 2017 farm lease in Iowa. Whether you’re a landlord or a tenant, Iowa law requires that you formally notify the other party by September 1 if you don’t wish to continue the current lease under its existing terms for another year. This rule applies equally to oral leases or written leases and to one-year leases or multi-year leases. Regardless of the length of the term of the original lease, the auto-renewal provision extends an expiring lease...
By: Kristine A. Tidgren August 22, 2017
Update: On October 23, 2017, Iowa withdrew its proposal for a stopgap measure. Earlier this month, we updated you on the crisis facing the Iowa individual healthcare insurance market and Iowa's proposal to keep the market afloat. The August 7 blogpost provides a detailed review of the Iowa Stopgap Measure designed to restructure the Iowa individual market. On August 21, 2017, Iowa submitted its formal Waiver Application to the U.S. Treasury Department and the U.S. Department of Health and...
By: Kristine A. Tidgren August 21, 2017
The Iowa Court of Appeals recently affirmed a Winterset couple's right to ownership of an asphalt driveway and two carports through adverse possession. The case presents a good overview of this powerful, yet sometimes-forgotten legal doctrine. The doctrine of adverse possession provides that sometimes a trespasser can become a rightful owner. This often arises when there is an honest mistake regarding a boundary line and mistaken possession continues for more than 10 years (in Iowa). That’s...
By: Kristine A. Tidgren August 10, 2017
During a financial downturn, even secured creditors often find themselves with no real recourse. Junior lienholders, in particular, are often left in the cold, even when It seems there is enough collateral to go around. A recent bankruptcy case illustrates this fact. The debtors in this Chapter 7 bankruptcy case were a husband and wife engaged in a farming operation. They owned farm machinery and equipment, which netted $55,613 in sales proceeds, and a homestead valued at $292,000. Farm Credit...
By: Kristine A. Tidgren August 8, 2017
Background The tax code allows an enhanced deduction for the donation of a qualified conservation easement. IRC § 170(b)(1)(E). This deduction is generally limited to 50% of the donor's “contribution base,” which is the taxpayer's adjusted gross income (computed without regard to any net operating loss carryback for the taxable year), less the value of other charitable contributions for the year. IRC § 170(b)(1)(G). A special rule applies to “qualified farmers and ranchers.” These taxpayers may...
By: Kristine A. Tidgren August 7, 2017
Update: On October 12, 2017, President Trump announced that he would be ending CSR payments effective October 18, 2017. Update: Iowa's final waiver request was sent to the federal agencies on August 21, 2017. On August 16, 2017, Medica filed an amended rate request that seeks a 56.7% premium increase for its 2018 plans. For updates regarding this developments, read this post. Iowa is facing a crisis in its individual health insurance market. According to the Iowa Insurance Commissioner, absent...
By: Kristine A. Tidgren July 25, 2017
Iowa Court Analyzes Breach of Contract Damages
The Iowa Court of Appeals recently decided a case that well illustrates how contractual damages are to be calculated: the non-breaching party is generally entitled to be placed in as good a position as he or she would have occupied had the contract not been breached, nothing more, nothing less. The facts were typical. A farmer engaged a builder to construct a pole barn. The total cost for the barn, including supplies and labor, was supposed to be $265,210. The farmer paid the builder $238,689,...
By: Kristine A. Tidgren July 24, 2017
On June 30, 2017, the Iowa Supreme Court ruled that a 1977 injunction requiring a railway company to rebuild a dike, expired under a 20-year limitations period set forth in Iowa Code § 614.1(6). Consequently, a drainage district’s action seeking to enforce that injunction was dismissed. The case arose because of ongoing drainage problems created by a railroad bridge constructed in 1872. The bridge allows railroad tracks to pass over Whiskey Creek in Louisa County. During heavy rains, sediment...
By: Kristine A. Tidgren July 23, 2017
Damages Awarded to Farmer for Breach of Manure Easement Agreement
The Iowa Court of Appeals recently interpreted a manure easement agreement and agreed that a farmer was entitled to damages for a hog facility’s breach of the agreement. The court did reduce the damages from $70,433.93 to $43,909.99 after finding that the farmer had failed to prove damages for the year he planted soybeans. In addition, the farmer received $15,451.81 in attorney fees and $3,000 in appellate attorney fees. The farmer purchased 146 acres of farmland from a couple that retained a...
By: Kristine A. Tidgren July 7, 2017
With the ink barely dry on the $217.7 million Kansas class verdict, Judge Lungstrum has set forth the plan for trying the additional class claims comprising the Kansas multi-district litigation. On July 6, the court ordered the following schedule: Arkansas and Missouri class claims will be tried together on January 22, 2018, with dispositive motions due September 22, 2017. Illinois and Nebraska class claims will be tried together on April 4, 2018, with dispositive motions due January 5, 2018....
By: Kristine A. Tidgren June 29, 2017
On June 27, 2017, the EPA and the U.S. Army Corps took the first step to rescind and replace the embattled Clean Water Rule, also called "Waters of the United States" or WOTUS. The agencies formally submitted a proposed rule to rescind the 2015 WOTUS rule and recodify (on an interim basis) the same regulatory text that existed prior to the 2015 rule. The proposed rule will be published in the Federal Register in about a month. Background The agencies issued the final Clean Water Rule on May 27...
By: Kristine A. Tidgren June 23, 2017
The jury returned a big verdict against Syngenta this morning in the first trial of the massive Syngenta GMO litigation. This case was presented on behalf of a class of more than 7,000 Kansas corn producers, specifically those Kansas producers who priced corn for sale after November 18, 2013, and who did not purchase Viptera or Duracade corn seed. Any Kansas producers who met that definition and did not affirmatively opt out of the class were automatically part of this action. After a...
By: Kristine A. Tidgren June 22, 2017
Note: It was announced on June 27, 2017, that any vote on this bill would be delayed until after the Fourth of July recess. Today Senate Republican leaders unveiled a “discussion draft” of their bill to replace many provisions of the Affordable Care Act (ACA). As with the American Health Care Act of 2017 that passed the House on May 4, 2017, the Better Care Reconciliation Act of 2017 (BCRA) is designed to stay within the constraints of the budget reconciliation process. As such, the bill could...
This week I had the pleasure of attending the Iowa Bar Annual Meeting. The meeting allows attorneys from around the state to gather in Des Moines, connect with colleagues, and attend some great educational sessions. The Agricultural Law Section of the Bar always provides its own track of programming focused on issues important to rural clients. It's wonderful to meet with this group and to see the expertise and concern these attorneys bring to their work. My part of the program was to share a...
By: Kristine A. Tidgren May 31, 2017
Update: This case was settled in August 2017 before going to trial. Last summer, a federal court found a California landowner liable for violating the Clean Water Act (CWA)[1] because he tilled a 450-acre parcel of his land to plant wheat. He is now preparing for an August 14, 2017, trial. At issue in the trial will be (1) the scope of his CWA violations, (2) the appropriateness of the United States’ requests for restoration and mitigation, and (3) the amount of his civil penalty. The...
By: Kristine A. Tidgren May 25, 2017
The U.S. Court of Appeals for the District of Columbia issued a blow to the Federal Aviation Administration (FAA) last week when it vacated the portion of a 2015 FAA Rule requiring registration of model aircraft. On December 14, 2015, the FAA announced a new Rule requiring registration of small unmanned aircraft systems (UAS) weighing more than 0.55 pounds and less than 55 pounds. Effective December 21, 2015, the Rule required owners of small UAS, including those operated strictly as model...
By: Kristine A. Tidgren May 24, 2017
Iowa Supreme Court Upholds Class Certification in Nuisance Case
The Iowa Supreme Court recently blessed a class action, paving the way for roughly 4,000 Muscatine residents to potentially obtain damages from a local corn wet milling plant. Background The case was filed in 2012 by eight Muscatine residents living near a milling plant operated by Grain Processing Corporation (GPC). GPC has used this plant to convert corn kernels into products for commercial and industrial use since 1943. This is the second time the Iowa Supreme Court has heard claims relating...
By: Kristine A. Tidgren May 16, 2017
“Ademption” isn’t a doctrine often discussed outside of law school classrooms. But a recent case from the Iowa Supreme Court signals that it’s time for a refresher. Steinberg v. Steinberg, 2017 Iowa Sup. LEXIS 44 (April 28, 2017) illustrates the sometimes unexpected impact this doctrine can have on an estate plan. It’s also an exemplar for the need to regularly review estate planning instruments. What is Ademption? Ademption is broadly defined as a “taking away” of a specific bequest from a...
By: Kristine A. Tidgren May 15, 2017
Iowa SF 505, signed into law on May 9, 2017, authorizes tax-preferred “First-Time Homebuyer Savings Accounts” (FTHSA). These new accounts will be available beginning in tax year 2018. The benefit of the new law is that account holders may exclude from their Iowa adjusted gross income (AGI) yearly deposits into FTHSAs in amounts up to $2,000 a year. Married taxpayers who file a joint return may exclude up to $4,000 a year if that money is deposited into a joint account. These exclusion amounts...
By: Kristine A. Tidgren April 28, 2017
The Iowa Legislature’s 2017 session drew to a close on April 22, 2017. For agriculture, the session was largely marked by the state’s revenue shortfall, which left tax cuts important to farmers on the table. It also meant the session adjourned for another year without a long-term water quality funding mechanism. Nonetheless, the legislators passed a number of bills impacting agriculture or rural landowners this session. Following are highlights. Signed by the Governor Classifying Palmer...
By: Kristine A. Tidgren April 26, 2017
As President Trump’s first 100 days were winding down, his Administration unveiled a purported tax reform proposal designed to stimulate “economic growth” and increase “American jobs.” The proposal was unveiled during a press conference April 26. It was accompanied by a one-page list of bullet points. The headline from the media event was that President Trump is seeking to implement a “massive tax cut,” reducing corporate taxes from 35% to 15%. The reality of the announcement is that we really...
By: Kristine A. Tidgren April 20, 2017
D.C. Circuit Says Commercial Animal Farms Must Report Air Emissions
The Consolidated Appropriations Act, 2018 (Omnibus Bill), signed into law, on March 23, 2018, has exempted the reporting of "air emissions from animal waste at a farm" under CERCLA. This exemption is included in Title XI of the Act, called the “Fair Agricultural Reporting Method Act” or “FARM Act." Last week, the United States Court of Appeals for the District of Columbia vacated an EPA final rule that had been in place for nine years. The Rule[i] exempted most farms from CERCLA[ii] and EPCRA[...
By: Kristine A. Tidgren April 18, 2017
Update: The 2017 legislative session ended without passage of any legislation relating to the Beginning Farmer Tax Credit. As such, the changes detailed in this posting will occur January 1, 2018. As the 2017 Iowa legislative session winds down, a program key to Iowa’s beginning farmers could see some significant changes. Unless the Iowa Legislature acts to extend various provisions of the Iowa Beginning Farmer Tax Credit (BFTC) program, it will look very different in 2018. The Iowa Legislature...
By: Kristine A. Tidgren April 11, 2017
Last December, we told you that the Grain Inspection, Packers and Stockyards Administration (GIPSA), the USDA division tasked with interpreting the Packers and Stockyards Act of 1921, 7 U.S.C. 181 (the Act), unveiled an interim final rule and two proposed rules that had been in the works for many years. The Interim Final Rule (§ 201.3(a), (b)) specified that conduct or action can sometimes violate the Act without a finding of harm or likely harm to competition. One of the proposed rules...
By: Kristine A. Tidgren April 9, 2017
A jury returned a verdict in favor of the Kansas class plaintiffs in the amount of $217.7 million on June 23, 2017. Read more here. Note: The first bellwether trial in the Minnesota litigation was scheduled to begin April 24, 2017. It has been postponed to July 10. Last week, Judge John Lungstrum, the federal district judge assigned to the nationwide Syngenta litigation, ruled on the parties’ first motions for summary judgment. These motions were restricted to cover only those claims...
By: Kristine A. Tidgren March 31, 2017
Last week, the Iowa Supreme Court considered its first case challenging an Iowa Department of Revenue’s (IDOR) assessment of corporate income tax since 2010.[i] In both cases, the taxpayers lost, but this time it was because the taxpayer did not have a taxable nexus in Iowa. The question before the Court in 2017 was whether the parent company of an affiliated group had properly joined a consolidated Iowa return. IDOR determined that the consolidated group was improper and assessed $2,558,989 in...
By: Kristine A. Tidgren March 29, 2017
Today, Governor Branstad signed SF 447 into law. The new law, designed to curb damage awards in nuisance cases brought against responsible animal feeding operations, went into effect immediately. The stated purpose of the law is to encourage animal feeding operations to “adopt existing prudent and generally utilized management practices for their animal feeding operations” and to “provide a reasonable level of protection to persons engaged in animal agricultural production from certain types of...
By: Kristine A. Tidgren March 18, 2017
Update: On April 11, 2017, DMWW announced that it would not be appealing this decision. Two years and one day after the Board of Water Works Trustees for the City of Des Moines (DMWW) filed its controversial lawsuit against the drainage districts in three northwest Iowa counties, a federal court has dismissed the action in its entirety. After two years and the expenditure of hundreds of thousands of dollars, the merits of the case were never considered. The court was required to dismiss the...
By: Kristine A. Tidgren March 10, 2017
Last year, many of us were surprised by an Iowa Court of Appeals decision that held that a single grazing horse was sufficient to establish a farm tenancy. Why did this matter? Because under the court’s ruling, the owners of the horse (and arguably anyone with backyard chickens or a pet emu) were entitled to the protection of the Iowa farm tenancy termination statute. Under Iowa Code § 562.6, if written notice is not sent via certified mail before September 1,[i] the lease automatically renews...
By: Kristine A. Tidgren March 9, 2017
Update: The 2017 Iowa Legislative Session ended on April 22, 2017. No water quality legislation was enacted. As we wait for the judge to rule on two pending summary judgment motions in the Des Moines Water Works lawsuit, two water quality funding bills with some traction are working their way through the Iowa legislative process. HSB 135 passed out of an Iowa House subcommittee on February 24, and SSB 1034 was recommended for passage by a Senate subcommittee on March 1. The bills are similar,...
By: Kristine A. Tidgren March 7, 2017
First Official ACA Repeal and Replacement Proposal Unveiled
Update: On March 24, House Speaker Paul Ryan cancelled a vote scheduled for that day on the Republicans proposed repeal and replacement plan. Officials have stated that they will now turn their attention to tax reform. It is unclear whether Republicans will take another stab at crafting repeal and replacement legislation before the budget reconciliation window closes later this year. We will keep you posted. House Republicans offered the text of their first official proposal for an Affordable...
By: Kristine A. Tidgren February 28, 2017
Update: On March 29, 2017, SF447 was signed into law by Governor Branstad. The final law is different from HSB134 described below. Please read this blogpost for a description of the new law. HSB134 passed out of an Iowa House agricultural subcommittee on February 22. The bill would limit allowable damages in nuisance lawsuits filed against animal feeding operations that have used “existing prudent and generally utilized management practices reasonable” for their operations. The bill would also...
By: Kristine A. Tidgren February 24, 2017
In a 4-3 decision, the Iowa Supreme Court today ruled­­­ that a 69-year-old woman was a “vulnerable elder” under Iowa’s Elder Abuse statute because of her age. Family Dispute The case arose because a “do-it-yourself” estate planning strategy went awry. The mother put the title of her mobile home (where she lived) in her adult son’s name. She told him that when she died it was to be his inheritance. She continued to live in the mobile home and pay taxes on it. At the same time, the mother...
By: Kristine A. Tidgren February 17, 2017
A Polk County District Court judge has ruled that the Iowa Utilities Board properly acted within its discretion in determining that the Dakota Access pipeline would promote the “public convenience and necessity.” The court also found that the Board had statutory authority to grant Dakota Access eminent domain over impacted parcels of agricultural land. The ruling was in response to four petitions for judicial review filed with the court following the Board’s decision to grant a hazardous...
By: Kristine A. Tidgren February 14, 2017
In a filing last evening, the parties to the Des Moines Water Works lawsuit—the Board of Water Works Trustees and the drainage districts—again showed they are miles apart in their interpretation of the law. This time, the difference is in how they interpret the answers by the Iowa Supreme Court to four certified questions posed to the Court by the federal district court hearing the case. As we’ve detailed, the January 27, 2017, opinion from the Iowa Supreme Court closed the door to DMWW’s...
By: Kristine A. Tidgren February 9, 2017
The Iowa Court of Appeals yesterday upheld a jury verdict awarding a brother more than $1.5 million in damages against his two sisters. The court found that substantial evidence supported the jury’s finding that the sisters exerted undue influence over their father, causing him to execute a will that disinherited the brother. The court agreed that the evidence supported a finding that the sisters had tortiously interfered with the brother’s inheritance. Finally, the court upheld the jury’s...
By: Kristine A. Tidgren January 31, 2017
Last week, the Iowa Court of Appeals upheld a trial court’s order specifically enforcing a partition fence agreement between neighbors. The opinion illustrates that such an agreement does not necessarily preclude costly litigation. It also demonstrates the importance of engaging legal counsel at the beginning of a dispute. The plaintiff and defendant were adjoining landowners. Plaintiff had cattle, but it appears that defendant did not. Under Iowa law, adjoining landowners must share the cost...
By: Kristine A. Tidgren January 25, 2017
Iowa Legislature Will Not Couple for 2016
On February 10, 2017, Iowa Department of Revenue issued helpful documents to help preparers contend with nonconformity. Faced with a $118 million budget shortfall, Iowa legislators have decided to not conform Iowa tax law with federal tax law for 2016. That means, for some, Iowa taxable income will look very different from federal taxable income, and some Iowans will have much higher tax liability. It also means that tax preparers will have a large headache as they try to sort out the...
By: Kristine A. Tidgren January 24, 2017
Open enrollment for purchasing 2017 health plans on the Marketplace ends January 31. In the meantime, Congress and President Trump have been paving the way to unwind and recalibrate the Affordable Care Act, a massive chunk of (largely) tax legislation. Executive Order Trump concluded his first day on the job by signing an Executive Order stating that, pending repeal of the ACA: It is imperative for the executive branch to ensure that the law is being efficiently implemented, take all actions...
By: Kristine A. Tidgren January 12, 2017
A custom feeding endorsement may not cover growers for unexpected or negligent losses to livestock. An opinion from the Iowa Court of Appeals yesterday again raises this important warning. In Schulz Farm Enterprises v. IMT Insurance, the court found that a custom feeding endorsement in a contract growers’ insurance policy did not provide coverage for the loss of 837 hogs caused by an electrical breaker malfunction in the hog building. This ruling extended the application of Boelman v. Grinnell...
By: Kristine A. Tidgren January 5, 2017
In light of the tough farm economy, dealers are offering producers even more options when it comes to purchasing upgraded equipment. Because different tax implications flow from different contractual arrangements, it is crucial that a producer understand the true nature of a lease or purchase contract before he signs it. This will avoid big surprises come tax time. It is important to understand that the IRS does not always consider a “lease” a “lease.” What matters is not the name given to a...
By: Kristine A. Tidgren December 29, 2016
The Iowa Supreme Court recently provided an excellent overview of the rules governing the partition of concurrently owned property in Iowa. In reversing a court of appeals decision ordering a partition in kind, the Court reiterated that Iowa law favors partition by sale. In the case before it, the Court ruled that the party seeking an in-kind division had not established that such a split would be both equitable and practicable. Facts The parties were biological siblings (a brother and a...
By: Kristine A. Tidgren December 16, 2016
“Midnight” action by the USDA’s Grain Inspection, Packers and Stockyards Administration (GIPSA) caused a stir this week. GIPSA, the USDA division tasked with interpreting the Packers and Stockyards Act of 1921, 7 U.S.C. 181, (the Act) unveiled an interim final rule and two proposed rules that have been in the works for many years. Controversy over the set of rules—which GIPSA has tagged the Farmer Fair Practices Rules—highlights a split between the meat industry on one side, and some livestock...
By: Kristine A. Tidgren December 13, 2016
While death may be beneficial for tax purposes, it is difficult to regard it as a tax avoidance scheme. This line is a great summary of the reasoning of the Tax Court in a recent case that illustrates an interesting interplay between cash accounting and death. The facts in Backemeyer v. Commissioner are not atypical. In 2010, a sole proprietor farmer prepaid and deducted the cost of his 2011 inputs as ordinary and necessary business expenses. In 2011, before actually using those inputs, the...
By: Kristine A. Tidgren December 7, 2016
On October 31, 2017, IRS issued Notice 2017-67, which provides guidance on QSEHRAs. On February 27, 2017, the IRS issued a notice stating that employers can wait to provide the required initial notice until IRS issues futher guidance, which is expected soon. President Obama signed this provision into law on December 13, 2016. The Senate today overwhelming concurred with the House, sending the 21st Century Cures Act to the President for signature. It is expected that President Obama will sign...
By: Kristine A. Tidgren December 1, 2016
In a case study of the balance of governmental powers, the United States Court of Appeals for the Ninth Circuit ruled this month that local ordinances passed by three Hawaii Counties to ban the cultivation of GM (genetically modified) plants were preempted by state and federal law. The cases have been around for almost as long as the ordinances. In 2013 and 2014 the Counties of Kauai, Hawaii, and Maui enacted ordinances to stop the growing of GE plants within their jurisdictions. The counties...
By: Kristine A. Tidgren November 30, 2016
The November 8, 2016, election will be long-remembered. Although the result was surprising to many, it was largely driven by rural Americans seeking change to the status quo. But, what will a new Administration actually mean for rural America? If this election taught us anything, it taught that predictions aren’t often worth a whole lot. Even so, as the dust settles, it may be helpful to consider the potential impact of the election on several major policy issue facing agriculture. In the days...
By: Kristine A. Tidgren November 23, 2016
The Iowa Court of Appeals today affirmed a half a million dollar judgment against Prestage Farms in a neighboring landowner’s nuisance lawsuit alleging that the company’s hog confinement substantially deprived her of the comfortable use and enjoyment of her property.[i] The jury awarded the landowner damages of $100,000 for loss of past enjoyment, $300,000 for loss of future enjoyment, and $125,000 for diminution of property value. In rendering its nuisance verdict, the jury found that Prestage...
By: Kristine A. Tidgren November 18, 2016
Ninth Circuit Affirms Dismissal of California Egg Lawsuit
I’ve called it the “Hokey-Pokey” law. The California Legislature passed AB 1437 in 2010 to make it a crime to sell a shelled egg in California if that egg came from a hen confined in a cage that did not allow it to “lie down, stand up, fully extend its limbs, and turn around freely” (hence the Hokey-Pokey reference). The law, which was effective January 1, 2015, stemmed from Proposition 2, a 2008 California ballot initiative requiring all California egg producers to raise their hen-laying eggs...
By: Kristine A. Tidgren November 10, 2016
Family Conflict Signals Need for Estate Plan
Larry died intestate, survived by his third wife and sons from a previous marriage. So begins a recent opinion from the Iowa Court of Appeals. The word intestate often signals difficulty, but it can mean special difficulty when it's found in the same sentence as third wife and sons from a previous marriage. Life can get complicated. A recent Iowa Court of Appeals decision illustrates why estate planning in these complicated situations is especially important. The facts in this case were...
By: Kristine A. Tidgren October 28, 2016
The Iowa Supreme Court today issued an opinion clarifying the reach of Iowa Const. art. I, § 24. The Court ruled that the provision does not apply to lands suitable for agricultural purposes if only an incidental portion of the land is used for farming purposes. Iowa Const. art. I, § 24 states: No lease or grant of agricultural lands, reserving any rent, or service of any kind, shall be valid for a longer period than twenty years. The land at issue was 300 acres (only a a portion of which was...
By: Kristine A. Tidgren October 20, 2016
Last year, the Iowa Department of Revenue unveiled a new form for claiming the Iowa Capital Gain Deduction. IA 100 was designed to collect key information up-front, rather than after the fact, regarding transactions qualifying for the rather unique Iowa deduction. The change was met with some concern and confusion, particularly among taxpayers (and preparers) reporting transactions involving cattle, horses, or breeding livestock (by far the most common trigger for the deduction). But, rest...
By: Kristine A. Tidgren October 14, 2016
Iowa Supreme Court Finds That At-Will Contract Was Unilaterally Modified
This morning, the Iowa Supreme Court issued an opinion clarifying that an at-will contract with an independent contractor can be unilaterally modified prospectively, upon reasonable notice. A proposal for modification effectively terminates the original contract and offers new terms for acceptance. The modification can be accepted by performance or the contract terminates. This is the same rule that has applied in Iowa for at-will employment contracts. Last year, however, the Iowa Court of...
By: Kristine A. Tidgren October 13, 2016
Iowa Court Says That City Must Pay to Expand Easement
A case decided yesterday by the Iowa Court of Appeals highlights a general, yet important principle governing Iowa easements: Once a valid easement has been created and the servient landowner justly compensated, the continued use of the easement must not place a greater burden on the servient estate than was contemplated at the time of formation. In the case at hand, the court affirmed a district court ruling finding that the City of Bettendorf violated that principle by initiating a new...
By: Kristine A. Tidgren October 11, 2016
Briefly Reviewing the Candidates' Tax Plans
During this election season, we’ve had a number of questions regarding what the candidates' tax proposals would mean for typical taxpayers, particularly farmers. In this post, I’ll provide a high level summary of several of the key provisions proposed by the two major candidates. Because both tax plans lack key details, it is impossible to assess the actual impacts of the provisions if they were enacted. Rather, this high level overview is designed merely to objectively review several of the...
By: Kristine A. Tidgren September 28, 2016
A case from the Iowa Court of Appeals today highlights a little provision in an Iowa wind energy agreement that may have killed a contract for the sale of farmland. This case should remind anyone negotiating a wind energy agreement to understand the provisions and their consequences before you sign the agreement. The defendants in this case owned 149 acres in Dickinson County. In 2009, they entered into a wind energy lease and agreement with a wind company, and the wind company constructed a...
By: Kristine A. Tidgren September 27, 2016
Last Friday, the United States Court of Appeals for the District of Columbia vacated guidance from the Occupational Safety and Health Administration (OSHA). The guidance, which was issued in the form of a 2015 Memorandum, required farm supply companies selling anhydrous ammonia to--for the first time--comply with a complex safety program designed to protect workers from highly hazardous chemicals. Background OSHA is tasked with protecting the health and safety of Americans in the workplace. In...
By: Kristine A. Tidgren September 15, 2016
Note: On July 13, 2017, the Iowa Supreme Court granted a petition for further review of this case. We will keep you posted! We’ve discussed in past articles the difficulties that can arise when parents leave farmland to their children as tenants in common. Several sibling may wish to sell, others may wish to keep the land in the family. This type of disposition often leads to unfortunate fighting and lengthy litigation. And that’s just what happened in a case for which the Iowa Court of Appeals...
By: Kristine A. Tidgren September 13, 2016
The Eighth Circuit Court of Appeals granted a big win to CAFO owners last Friday when it ruled that the EPA abused its discretion by concluding that the release of personal information about CAFO owners would not invade substantial privacy interests. Background The case arose when three organizations—Earthjustice, the Pew Charitable Trusts, and the Natural Resources Defense Council—filed a Freedom of Information Act (FOIA) request seeking detailed records about confined animal feeding...
By: Kristine A. Tidgren September 6, 2016
It is well-known that fewer people in the United States are getting married. In fact, according to the CDC, marriage rates in the United States have been in a steady decline since the 1980s. Conversely, cohabitation rates are steadily rising. A recent case from the Iowa Court of Appeals reminds us that sometimes a cohabitation relationship can lead to a common-law marriage. This means that when the relationship ends, a party can seek standard dissolution remedies such as alimony or an equitable...
By: Kristine A. Tidgren August 26, 2016
During the past several years it often seemed like the day would never come. But Monday, August 29, the new FAA rule for integrating small unmanned aircraft systems (UAS) into the U.S. airspace is effective. The rule applies to all UAS weighing less than 55 pounds (sUAS) that are flown for commercial (not hobby) purposes. Any farming use falls into the commercial-use category. Operators can continue to fly a sUAS for fun without permission from the FAA. All sUAS operators, however, must...
By: Kristine A. Tidgren August 24, 2016
Updates: August 29: The Polk County District Court denied the landowners' request for a stay. Read the order here. August 26: IUB denied the landowners' request for a stay. The temporary stay, however, will remain in place through Monday to allow the landowners an opportunity to file a new action with the district court. Read the order here. Just next door to the location of next week’s Farm Progress show (and across Iowa), Dakota Access is working to construct its pipeline to transport crude...
By: Kristine A. Tidgren August 10, 2016
It was the wrong procedural posture to create new law. But a recent case from the United States District Court for the District of Connecticut has some interesting discussion regarding limits to the FAA’s right to regulate airspace. The case arose because an enterprising UAV owner posted two YouTube videos under the username “Hogwit.” The videos went viral and caught the attention of the FAA. The first video was a 14-second clip showing a hovering UAV firing an attached handgun. The second was...
By: Kristine A. Tidgren August 9, 2016
Update: On October 4, 2017, Treasury announced that it would be withdrawing these proposed regulations. First some context. The American Taxpayer Relief Act of 2012 has ensured that only a select few pay any estate taxes in America. To be liable for estate tax in 2016, for example, you must die with more than $5.45 million in assets. The news gets better for married taxpayers. With the implementation of permanent “portability,” spouses can essentially share their combined exclusions, meaning...
By: Kristine A. Tidgren August 1, 2016
An Accidental Settlement?
A case from the Iowa Court of Appeals last week should warn attorneys and clients that they must remain on the same page during settlement negotiations. If they don’t, the result can be bad…both for the client and the attorney. The background facts are summarized in these short sentences from the co­­urt’s opinion: Atellia Kinzenbaw died testate, leaving one-sixth shares of the family farm to six of her children. [Editorial Comment: A discussion for another day!]. Doyle was one of the six...
By: Kristine A. Tidgren July 27, 2016
Overview The Iowa Court of Appeals issued its opinion today in the seemingly never-ending Baur Farms litigation. The court affirmed the district court’s order, which dismissed the minority shareholder’s lawsuit seeking to dissolve the corporation on grounds of “shareholder oppression.” This case was before the district court on remand after the Iowa Supreme Court issued its key 2013 ruling setting forth the new Iowa standard for minority shareholder oppression in the context of a closely-held...
By: Kristine A. Tidgren July 25, 2016
By now you’ve probably read about the Pennsylvania woman who was recently sentenced to prison for various crimes stemming from her decades-long scam of posing as a lawyer. She had no law license and had never gone to law school, yet she practiced tax and estate law for 10 years, even becoming a partner of her small firm in rural Pennsylvania and president of her local bar association. Which, of course, begs the question, “How was this possible?” Apparently, no one during that 10-year period—not...
By: Kristine A. Tidgren July 14, 2016
Note: President Obama signed this legislation on July 29, 2016. It’s legislation that completely satisfies no one. However, to the majority of lawmakers, it is a better choice than the prospect of food manufacturers, producers, and retailers facing 50 different standards for disclosing the presence of genetically engineered ingredients in food. As such, S.764 garnered enough support to easily pass the House today, 306-117. This followed passage of the bill in the Senate last week by a vote of...
By: Kristine A. Tidgren June 30, 2016
When a court orders a farm lease to continue in light of a contentious relationship, additional litigation is likely to ensue. And that's just what happened in a case decided by the Iowa Court of Appeals yesterday. The case involved a tenant who had farmed his mother’s ground before she died. After her death, the land was passed to a family trust, of which the tenant was a co-trustee. Disagreements arose amongst the three co-trustees, and lawsuits were filed. The trial court ultimately ruled in...
Barring unexpected immediate Congressional action, Vermont Act 120, the nation’s first mandatory GMO labeling law, will go into effect tomorrow. What does this mean for the rest of the nation? Most likely it means that we will see preemptive federal GMO labeling legislation in place by at least year-end . The new Vermont law requires all food produced from “an organism in which genetic material has been changed” to be labeled. If that food is sold by a retailer, an “easily found” label must...
By: Kristine A. Tidgren June 29, 2016
No, the Des Moines Water Works lawsuit has not been settled! Rather, the Iowa Court of Appeals today issued an opinion interpreting a section of Iowa drainage law and determining that it imposes no legal duties on a county board of supervisors. In 2014, a landowner complained to his county board of supervisors that a county road was “damming up water” on his property north of the road. The road had “at some point in time” been altered, and bridges or wooden culverts that originally allowed the...
By: Kristine A. Tidgren June 15, 2016
Minority Owner of Family LLC Gets a Reprieve
The Iowa Court of Appeals—while denying a minority owner’s request to have his family LLC dissolved—breathed life back into his quest to receive “fair value” for his 27% ownership interest. The court reversed a trial court order that had directed the brother to transfer his interest in the LLC to the other two owners for no consideration. Background The LLC was formed shortly after three siblings in 2003 inherited property from their parents. The plaintiff sisters each invested $342,041 to form...
By: Kristine A. Tidgren May 27, 2016
Iowa Supreme Court Issues Much-Anticipated Ag Supply Dealer Lien Answers
A federal bankruptcy case has been shaping interpretation of the Iowa agricultural supply dealer lien statute since the operator of a farrow-to-finish hog facility declared bankruptcy in 2009. Today, the Iowa Supreme Court issued its second opinion in this case,[i] answering two key certified questions in this drawn out litigation. The answers to the two certified questions—which uphold the decision from the bankruptcy court--further refine the contours of the ag supply dealer lien established...
By: Kristine A. Tidgren May 13, 2016
This week, the Iowa Court of Appeals issued two opinions analyzing farm leases. We told you Wednesday about a most interesting case where the court held that a residential acreage tenant with a single horse was entitled to September 1 statutory termination notice. Although the second farm lease case of the week is less surprising, it’s helpful to review. The court analyzed several common farm lease provisions, and the court's analysis is useful to both producers and their advisors. Background...
By: Kristine A. Tidgren May 11, 2016
Note: On March 10, 2017, the Iowa Supreme Court vacated this decision, and affirmed the district court's order. In a most interesting case from the Iowa Court of Appeals today, the letter of the law prevailed, and the court ruled that a single, 38-year-old grazing horse was all that was needed to create a “farm tenancy” on a six-acre parcel. Thus, the court found that landlords were required to send statutory termination notice by September 1 to properly terminate a lease for a residential...
By: Kristine A. Tidgren April 28, 2016
A recent case from the Iowa Court of Appeals shines the spotlight on Iowa’s private condemnation statute, Iowa Code § 6A.4(2). The statute, which takes some people by surprise,[i] grants private landowners a narrow power of eminent domain to acquire an access route to a landlocked parcel. The Iowa case, Middle River Farms, LLC v. Antrim,[ii] demonstrates the importance of “firming up” casual rights of way. It also shows the discretion possessed by a trial court in granting an access route...
By: Kristine A. Tidgren April 18, 2016
Last week, the Iowa Legislature enacted new legislation to require that an agreement to terminate a farm lease be in writing. The Governor signed HF 2344 into law on April 13, 2016. This simple change better aligns Iowa's farm lease termination statute with legislative intent and court-declared policy and may prevent unnecessary court battles. It has long been the case in Iowa that, absent an agreement to terminate a farm lease, a farm tenant or a landlord must abide by strict statutory notice...
By: Kristine A. Tidgren April 14, 2016
The multidistrict Syngenta litigation, which is now deep in discovery for the first bellwether trial, saw several important developments last week. Judge Lungstrum entered several orders worth noting. Grain Exporters’ Motion to Dismiss Third-Party Complaint and Counterclaims First, on April 4, the court granted the motion of ADM, Cargill, and Rail Transfer to dismiss the third-party claims and counterclaims Syngenta had filed against them last November. Syngenta had claimed in its third-party...
By: Kristine A. Tidgren April 8, 2016
If there’s a takeaway sentence from the latest Iowa Court of Appeals decision to analyze a breach of warranty claim, it is this: The doctrine of unconscionability…does not rescue people from bad bargains. In other words, be careful what you sign, it could come back to bite you. In this case, the plaintiff was a sodding and turf business operated by an owner with more than four decades of experience. He purchased an irrigation system from a dealer, which , in turn, obtained the system from a...
By: Kristine A. Tidgren April 7, 2016
A case from the Iowa Court of Appeals yesterday demonstrates the need for clear contractual language in farm leases. Some may say this principle is important even when family members are involved. This case demonstrates the importance of this principle especially when family members are involved. The case before the court involved the interpretation of a 10-year crop-share lease. The son, who had five siblings, was the tenant, and the landlord was a family farm corporation. The father was the...
By: Kristine A. Tidgren April 5, 2016
The drainage districts in the Des Moines Water Works (DMWW) lawsuit have now filed their second motion for partial summary judgment. Last fall, they asked the judge to rule in their favor as a matter of law on DMWW’s state law tort claims, such as nuisance and negligence. Several questions of Iowa law raised by that motion are currently pending as certified questions before the Iowa Supreme Court. Motion for Partial Summary Judgment on Counts One and Two On April 1 (one month after completing...
By: Kristine A. Tidgren March 31, 2016
The 2016 Iowa Legislative Session is still underway, but many bills have already become law this session. Most of the high profile debate has centered on school funding, water quality, and tax coupling, which we have written about extensively. Along the way, however, several lesser-known bills impacting agriculture have found their way to the Governor’s desk and he has signed them into law. Following is a short summary of several new Iowa laws that impact agriculture to some degree. Beef...
By: Kristine A. Tidgren March 17, 2016
Ambiguous wills often lead to unfortunate family disputes. And such a dispute came before the Iowa Court of Appeals recently. Although the disagreement arose because of a seemingly ambiguous section in their mother’s will, the fight between a brother and sister came before the court as a claim for adverse possession.To understand this dispute, it is helpful to see the portion of the mother’s will that fueled it (the relevant portions have been bolded for effect): ARTICLE THREE 1. I give all of...
By: Kristine A. Tidgren March 10, 2016
Iowa Utilities Board Has Approved Bakken Pipeline
The Iowa Utilities Board voted 3-0 today to grant a hazardous liquid pipeline permit to Dakota Access, LLC under Iowa Code § 479B. The Board determined that the project would “promote the public necessity and convenience” as is required by the law. Dakota Access filed its petition seeking the permit in January of 2015. They wish to build a 346-mile crude oil pipeline (30 inches in diameter) across Iowa. The pipeline would carry oil from the Bakken oil fields in North Dakota to a refining...
Yesterday, the Iowa Court of Appeals granted a new trial to an excavation company in a trespass action. At trial, the jury found the excavation company liable for $118,900 in damages for trespassing onto a farmer’s property and clearing trees and brush from a 12-foot wide strip of his fence row. The new trial was not granted because of any question as to the actual trespass. That had been admitted at trial. Rather, the court was concerned that the defendant was prejudiced by evidence that the...
By: Kristine A. Tidgren March 1, 2016
Welcome to March 1, a day with much significance for farmers. Farm Tax Returns Due March 1st is the deadline for farmers and fishermen to file their income tax returns and pay their taxes if they want to avoid an underpayment of estimated tax penalty. While this deadline still holds for federal taxes the year, the Iowa Department of Revenue has extended the deadline to April 30 for Iowa returns and taxes. Because April 30 is a Saturday, this means a May 2 deadline for farmers to file their Iowa...
By: Kristine A. Tidgren February 28, 2016
Parents often make lifetime gifts to their children, often as part of a farm or business transition planning strategy. These gifts often come under great scrutiny when the party receiving the gift is divorced from his or her spouse. During the dissolution proceeding, the spouse often argues that the gifted property should be subject to a fair division between the parties. The family members who gave the gift are often called to testify that they intended only their son or daughter to receive...
By: Kristine A. Tidgren February 23, 2016
In a divided 2-1 opinion, a three-judge panel ruled yesterday that the United States Court of Appeals for the Sixth Circuit has original jurisdiction to determine the validity of the Clean Water Rule. The opinion followed oral argument in December on the question of whether Congress intended circuit courts or district courts to have original jurisdiction in a case such as this. Petitioners from around the country, including states and industry groups, have challenged the validity of the new...
By: Kristine A. Tidgren February 11, 2016
Although recent talk of eminent domain has centered on high profile projects such as the Dakota Access pipeline, a less discussed provision of Iowa law confers a narrow power of eminent domain upon private citizens in certain cases where a landowner has a “land locked” parcel. A recent case from the Iowa Court of Appeals details how this law is applied. Iowa Code § 6A.4(2) confers the right to take private property for public use “upon the owner or lessee of lands, which have no public or...
By: Kristine A. Tidgren January 26, 2016
This month has seen several important developments in the Des Moines Water Works (DMWW) lawsuit against drainage districts in three northwest Iowa counties. On January 11, Judge Bennett ruled that the Iowa Supreme Court should decide four questions of Iowa law implicated by the lawsuit's tort and constitutional claims. Consequently, he certified these questions to the Iowa Supreme Court. Primarily, Iowa's highest court is asked to decide whether the claims for tort damages and equitable relief...
In Iowa we see a large variation in the way farm leases are structured. Many are oral, one-year leases that automatically renew from year to year. Others are written, five-year leases that must be recorded. And still others have their own unique approach. The Iowa Supreme Court recently reviewed one such lease and found it constitutionally infirm. Article I, section 24 of the Iowa Constitution states that no lease of agricultural lands “shall be valid for a longer period than twenty years.”...
By: Kristine A. Tidgren January 22, 2016
A recent case from the Iowa Court of Appeals should again remind landowners to protect their boundaries or lose them. The plaintiffs brought their action to establish a disputed boundary. Since at least 1992 (and possibly 1982), the parties’ properties had been separated by a fence that was approximately 33 feet from the actual survey line. The fence, which was maintained by the parties, encroached upon the plaintiffs’ land. When the defendants began to sell their property, the plaintiffs...
By: Kristine A. Tidgren January 19, 2016
As March 1 approaches, many landlords will see new tenants farming their property. Others will face lingering disputes from last crop year. This is a good time to review several important rights and obligations of landlords and tenants under Iowa farm leases. While these rights and obligations are primarily determined by the terms of a written lease, general legal principles apply to all Iowa leases. This article addresses several issues that often arise this time of year. Those wondering about...
By: Kristine A. Tidgren January 12, 2016
Yesterday saw a big development in the Des Moines Water Works case against three northwest Iowa drainage districts. Judge Bennett certified four questions of Iowa law to the Iowa Supreme Court.: Question 1: As a matter of Iowa law, does the doctrine of implied immunity of drainage districts as applied in cases such as Fisher v. Dallas County, 369 N.W.2d 426 (Iowa 1985), grant drainage districts unqualified immunity from all of the damage claims set forth in the Complaint? Question 2: As a...
By: Kristine A. Tidgren January 8, 2016
The Iowa Supreme Court issued an opinion today that may change the way many cases against insurance companies are tried. Because insurance coverage and farming operations go hand in hand, agricultural law attorneys should pay attention to Villarreal v. United Fire and Casualty Co.* and its implications. The case gave the Iowa Supreme Court its first opportunity to decide whether a breach-of-contract verdict in favor of an insured (against the insurer) precludes a subsequent action for first-...
By: Kristine A. Tidgren December 21, 2015
On December 18, President Obama signed into law an 887-page package of legislation designed to fund the government through 2016. Called the Consolidated Appropriations Act, 2016, the legislation made permanent or further extended many tax breaks important to farm producers and small businesses. These updates are discussed in a December 20, 2015, article found here. The legislation also impacts producers in several other important ways. Country of Origin Labeling The new Act amends the...
By: Kristine A. Tidgren December 14, 2015
The Federal Aviation Administration (FAA) announced a new rule today requiring registration of small unmanned aircraft systems (UAS) weighing more than 0.55 pounds and less than 55 pounds.. The official weight of the UAS includes any payloads, such as cameras. Under the new rule (which is effective December 21, 2015), any owner of a small UAS who has exclusively operated the UAS as a model aircraft before December 21, 2015, must register no later than February 19, 2016. Those who purchase their...
By: Kristine A. Tidgren December 10, 2015
Background The defendants included a husband and wife who owned a number of poultry-related companies. They each owned a 50 percent share of an LLC they established in August of 2010. The purpose of the LLC was to purchase eggs for hatching, coordinate delivery of hatched chicks to contracted growers, and coordinate the delivery of the grown birds to a family-owned poultry processing company. The plaintiff was a supplier of eggs for hatching. In early 2010 (before the LLC was formed), the...
By: Kristine A. Tidgren November 13, 2015
The Iowa Court of Appeals recently affirmed a dissolution decree involving a self-employed farmer and his ex-wife who was employed off the farm. The parties had been married for 16 years. The husband was 52 years old and the wife was 43 years old at the time of trial. The wife, who was a welder when the parties were married, had finished her associate’s degree during the marriage and was employed as a court clerk earning $35,970. The husband, who testified that he earned $170 in 2011, $30,795...
By: Kristine A. Tidgren October 29, 2015
The Tax Court recently found that a petitioner had not made a taxable gift in 1972 when he transferred stock to his children to settle a family lawsuit. Although the transfer had occurred decades earlier, the IRS issued a notice of deficiency to petitioner in 2013, asserting that the taxpayer (who was deceased at the time) owed $737,625 in unpaid gift taxes and an addition to tax of $368,813 for fraud. As an alternative to the fraud claim, the IRS contended that the petitioner owed an addition...
By: Kristine A. Tidgren October 28, 2015
The Iowa Court of Appeals issued another boundary by acquiescence case today, affirming a district court order establishing such a boundary between two residential properties. The case originated under the oft-applied Iowa law, Iowa Code § 650.14: If it is found that the boundaries and corners alleged to have been recognized and acquiesced in for ten years have been so recognized and acquiesced in, such recognized boundaries and corners shall be permanently established. “Acquiescence” is...
By: Kristine A. Tidgren October 21, 2015
Another development arose this week in the Des Moines Water Works lawsuit. The Board of Water Works Trustees (DMWW) filed its (very long) resistance to the drainage districts’ motion for partial summary judgment, which the districts had filed on September 24. The drainage districts’ motion and supporting brief asked the court to enter judgment for the defendants on DMWW’s tort claims. These claims, based on Iowa common law, include allegations of negligence, trespass, public nuisance, and...
By: Kristine A. Tidgren October 19, 2015
The U.S. Secretary of Transportation held a press conference today announcing that a new registration system for unmanned aircraft systems (UAS) (including hobby aircraft) should be in place by mid-December. The Secretary announced that he had created a task force comprising 25 to 30 representatives from the UAS industry, government, and the manned airline industry. He assembled the task force in response to numerous safety concerns arising from the increasing use of UAS in the U.S. airspace....
By: Kristine A. Tidgren October 17, 2015
The plaintiff was a trucker who entered into an oral agreement in 2001 with a milk cooperative. The trucker agreed to pick up milk from dairy farms and deliver it to the cooperative’s plant. Under the oral agreement, the cooperative was to pay the trucker a certain amount per gallon of milk delivered, plus $100 for each delivery trip. On July 31, 2013, the cooperative informed the trucker, in writing, that it was reducing the trip charge by $25 per month beginning in September, fully...
By: Kristine A. Tidgren October 9, 2015
The United States Court of Appeals for the Sixth Circuit has now stayed the Clean Water Rule nationwide. This temporary ruling brings uniformity to the patchwork of enforcement that has existed since the Rule’s August 28 effective date. As we’ve detailed in past articles, a United States District Court for the District of North Dakota temporarily enjoined enforcement of the Rule on August 27. The North Dakota court ruled the following week, however, that the injunction applied only to the 13...
By: Kristine A. Tidgren October 7, 2015
A federal judge from the United States District Court for the District of Columbia recently granted summary judgment to the EPA in a lawsuit challenging the agency’s decision to withdraw a proposed rule impacting confined animal feeding operations (CAFOs). The proposed rule, which was withdrawn in 2012, would have for the first time imposed information reporting requirements on CAFOs as part of the EPA’s administration of the Clean Water Act. The proposed rule arose over concerns that—despite...
By: Kristine A. Tidgren October 2, 2015
The drainage districts being sued by the Board of Water Works Trustees (DMWW) have filed their first dispositive motion. On September 24, the districts filed a motion asking the court to enter summary judgment in favor of the drainage districts on the common law claims alleged by DMWW. These claims--which are all asserted under Iowa common law--include negligence, trespass, public nuisance, and private nuisance. The defendants also asked the court to enter judgment in favor of the defendants on...
By: Kristine A. Tidgren September 2, 2015
Yesterday, a federal judge for the United States District Court for the Western District of Texas vacated the U.S. Fish and Wildlife Service’s (FWS) final rule[i] in which the agency listed the lesser prairie-chicken as a "threatened" species. The controversial rule was published April 10, 2014, and two months later the Permian Basin Petroleum Association and several New Mexico counties filed a lawsuit challenging its validity. The plaintiffs alleged that the FWS did not provide a rational...
By: Kristine A. Tidgren August 28, 2015
On the eve of the official effective date of the new Clean Water Rule (Fed. Reg. 37,054-127,), a North Dakota federal judge has issued a preliminary injunction to stop the EPA and the U.S. Army Corps of Engineers from enforcing it. The court stated: The court finds that under either standard – “substantial likelihood of success on themerits” or “fair chance of success” – the States are likely to succeed on their claim because (1) it appears likely that the EPA has violated its Congressional...
By: Kristine A. Tidgren August 21, 2015
It’s a rather small detail, but those small details often make all the difference when it comes to litigation. And that’s what happened in a recent case from the Iowa Court of Appeals. The court explained that the limitations period for claims alleging a breach of an express warranty differs from that for claims alleging a breach of an implied warranty. The difference lies not in the actual limitations period—which is five years for both types of warranties (as long as they are not written)—but...
By: Kristine A. Tidgren August 20, 2015
The Iowa Court of Appeals recently issued an opinion demonstrating a sometimes misunderstood feature of an occurrence-based liability policy: Insurance coverage ends when the policy lapses. In other words, if a business owner is covered by a liability policy when it performs faulty work, it may not be covered for damage stemming from that work if the damage occurs after the policy expires. This is an important distinction that impacts both businesses and consumers. The Iowa case was initiated...
By: Kristine A. Tidgren August 12, 2015
Perhaps the most misunderstood portion of Iowa farm lease law is that governing the proper termination of a lease. Iowa law is unique in that under Iowa Code §562.6, a farm lease renews automatically—under the same terms and conditions as the original lease—absent specific action by one or both parties to the lease. The automatic renewal provision applies to both oral and written leases. It also applies to leases covering any size of crop ground. Although prior law contained a “less than 40-...
By: Kristine A. Tidgren July 28, 2015
We’ve been keeping you informed about a Texas company’s proposal to build a crude oil pipeline across Iowa to transport oil from North Dakota to Illinois. Dakota Access has formerly requested a hazardous liquid pipeline permit from the Iowa Utilities Board and has been seeking to acquire voluntary easements from landowners along the pipeline’s proposed route. The pipeline has met firm opposition from many landowners. Yesterday saw a new development in this saga. Three landowners filed a...
By: Kristine A. Tidgren July 23, 2015
Iowa Court of Appeals Decides That the Thing Did Not Speak for Itself
The Iowa Court of Appeals recently affirmed that negligence must be proved and that merely showing that an accident occurred is not evidence. The case involved a trial court’s denial of a requested res ipsa loquitur instruction in a negligence case stemming from a hog building fire. The case provides a helpful review of the little-discussed—but potentially mighty—res ipsa loquitur doctrine. “Res ipsa loquitur,” is a Latin phrase meaning “the thing speaks for itself.” In the right type of case,...
By: Kristine A. Tidgren July 2, 2015
The Kansas Supreme Court recently disbarred a lawyer. It wasn’t the first disbarment of the year, and it likely won’t be the last.[i] The case of In re Rankin, however, may be the most head shaking. It’s a case study of a lawyer who apparently did not believe that the rules applied to him. A case study in how to let personal interest overcome professional obligation. A case study in how to be disbarred. The lawyer was admitted to practice law in Kansas in 1999. He was, according to many sources...
They wasted no time. The day the new Clean Water Rule was officially published, June 29, 2015, the lawsuits began. As of today, 27 states have joined lawsuits challenging the validity of the new Rule unveiled May 27 by the Environmental Protection Agency and the U.S. Army Corps of Engineers. Much of the most publicized criticism against the Clean Water Rule has been lodged by farming and industry groups.[i] However, it was the states (and more than half of them) that immediately ran to federal...
By: Kristine A. Tidgren July 1, 2015
Federal Judge Susan Mollway has struck down a Maui County Ordinance banning GMO crops. "A Bill Placing a Moratorium on the Cultivation of Genetically Modified Engineered Organisms" was passed by ballot initiative on November 4, 2014. Litigation over the Ordinance ensued immediately. On November 12, 2014, a group of citizens opposed to GMO technology filed a state court action seeking a declaration that the Ordinance was valid. The defendants removed the case to federal court and in Atay v....
By: Kristine A. Tidgren June 18, 2015
Mistakes happen. Sometimes mistakes lead to legal liability, as in the case of negligence. But sometimes, where it’s apparent that a mistake in an instrument was a mutual one, equity steps in to “reform” the mistake. No harm. No foul. The document is reformed to reflect the true intent of the parties. A recent case from the Iowa Court of Appeals demonstrates the application of this doctrine. It also shows that trying to take advantage of such a mistake in a court proceeding can lead to costly...
By: Kristine A. Tidgren June 11, 2015
A recent opinion from the Iowa Court of Appeals reminds us of the importance of written plans for family farming businesses. In a June 10 decision, the Iowa Court of Appeals turned away claims by a son that he was entitled to receive all of his deceased father’s farmland, despite a will provision leaving the property in equal shares to the son and his three siblings. The court did not address the question of whether the son was allowed to raise his promissory estoppel claim in a probate...
By: Kristine A. Tidgren June 9, 2015
On January 20, 2015, Dakota Access, LLC, filed with the Iowa Utilities Board a petition for a hazardous liquid pipeline permit. The proposal to construct a crude oil pipeline from the Bakkan oil fields to an Illinois refinery includes 346 miles of 30-inch pipeline through 18 Iowa counties. Since filing its petition, Dakota Access has been attempting to negotiate voluntary easement agreements with the landowners who would be impacted by the proposed project. If IUB grants Dakota Access approval...
By: Kristine A. Tidgren May 7, 2015
A recent case from the Iowa Court of Appeals reminds us that in order to acquire title to the property of another through a prescriptive easement (a non-exclusive form of adverse possession), the plaintiff must strictly prove the elements of the claim. In this case, the plaintiff proffered no such proof. Adverse possession is a unique doctrine that can seem quite unfair. It’s a method recognized in all states through which parties can acquire title to property that’s not actually theirs. To do...
By: Kristine A. Tidgren May 4, 2015
The Minnesota Department of Revenue announced special relief last week for poultry producers in Minnesota who were impacted by the H5N2 avian influenza outbreak. The Department announced that these producers will not be assessed penalties or interest if the outbreak prevented them from filing state returns or paying state taxes on time. This relief applies for all returns and tax payments due between April 23 and May 27, 2015. This relief does not apply to federal or local taxes. Producers...
By: Kristine A. Tidgren May 1, 2015
A recent Fifth Circuit opinion established that a federal court has jurisdiction to review the EPA’s denial of a rulemaking petition. It did, however, go on to establish a “highly deferential” standard of review, placing upon the agency only a “slight” burden to justify its decision to decline a necessity determination. Although the case is on remand to the district court for further review, this decision was a win for the agency. The case arose when a coalition of environmental groups...
By: Roger A. McEowen April 29, 2015
Financial stress in agriculture creates numerous legal issues. One of those that may not necessarily be high on the “radar screen” involves the purchasing of machinery and equipment. Does it matter if the purchase is from a private party or an implement dealer? It just might. There are at least a couple of common scenarios to watch out for. Buyer in the Ordinary Course of Business Under the Uniform Commercial Code, a buyer in the ordinary course (BIOC) is a person who, in good faith, and...
By: Kristine A. Tidgren April 28, 2015
A federal court in Vermont recently denied the request of food manufacturers to enjoin the enforcement of Vermont’s new Genetic Engineering (GE) labeling law set to go into effect next year. The court did, however, also refuse to dismiss the majority of the plaintiffs’ claims. As such, the validity of the law remains unsettled, and more opinions will issue down the road. Vermont Act 120 was signed into law on May 8, 2014. It is set to become effective July 1, 2016. The law requires food sold in...
By: Roger A. McEowen April 27, 2015
We all know that the deadline for filing the federal income tax return is April 15. But now since that date has passed, don’t think that the filing season is really over. If you are “hiding” assets overseas (and, yes, Mexico and Canada are “overseas”) you may have another form to file. It’s the Foreign Bank Account Report (FBAR) and the Form is FinCEN Form 114 (Form TD 90-22.1). This filing is not part of the tax return that you have to file by April 15, and its due by June 30. Also, the...
By: Kristine A. Tidgren April 24, 2015
The Iowa Court of Appeals Wednesday reduced a damages award granted to a couple who claimed their neighbor intentionally removed trees along their fence line. The plaintiffs, were self-described “tree people” who lived on a five and one-half acre rural land parcel. Their property adjoined that of the defendant, who was a farmer. The plaintiffs’ land was covered with timber and the property abutting the farmer’s crop ground was covered by an assortment of overgrown volunteer trees. The farmer,...
By: Kristine A. Tidgren April 23, 2015
In 2013, the Iowa Supreme Court ruled that the Iowa Recreational Use Statute did not bar a negligence action brought by a parent chaperone against dairy farmers giving a gratuitous farm tour to a kindergarten class. The dairy farmers had invited the kindergarten class to tour their farm to learn about a “typical day on the farm.” While touring the hayloft, a chaperone stood on a bale of hay covering a hole in the loft floor. The bale gave way, she fell through the hole, and she broke her leg....
By: Kristine A. Tidgren April 22, 2015
The United States Supreme Court is today hearing oral arguments in a raisin growers’ case raising important Fifth Amendment questions. The key questions, which stem from the operation of a 66-year-old USDA marketing order, include: (1) Whether a governmental mandate to relinquish specific, identifiable property as a "condition" to engage in commerce effects a per se taking and (2) Whether the Fifth Amendment requirement that the government pay just compensation for the taking of property...
By: Kristine A. Tidgren April 16, 2015
A Missouri statute designed to limit the damages recoverable by landowners in nuisance actions against farming operations has survived its first major challenge. In 2011, Missouri enacted Mo. Rev. Stat. §537.296, a "right to farm" statute designed to supplant the common law of private nuisance where the alleged nuisance stems from an agricultural operation. The statute, while not eliminating private nuisance actions, bars recovery for non-economic damages for items such as loss of use and...
By: Kristine A. Tidgren April 15, 2015
The Iowa Court of Appeals again set forth the requirements to prove an easement by prescription as yet another family feud played out in the court system. This case involved brothers and their mother. The plaintiffs, a husband and wife, lived on Tract A, a property they purchased in a partition auction stemming from the death of the husband’s father. In that same auction, the husband’s brother and mother purchased an adjacent 2.1-acre tract, subject to the mother’s life estate. The mother...
By: Kristine A. Tidgren April 14, 2015
The Iowa Court of Appeals recently had the opportunity to interpret Iowa Code §562.5A, which, in the absence of a writing to the contrary, grants tenants the right to harvest corn stalks until the lease terminates. Little has been written about his law, which was enacted in 2010 in response to the growing value of corn stalks. Agricultural attorneys must be aware of this law and its impact on their clients. The recent case provides a good overview of its significant implications and sets forth...
By: Roger A. McEowen April 8, 2015
Most U.S. businesses are family-owned, but statistics show that only about 30 percent of them survive to the next generation and only about 12 percent to the third generation. Why? Conflict among family members – sibling rivalry and battles with cousins are a major reason. So, a major issue in estate and succession planning for family businesses is how to appropriately deal with the potential for family conflict and associated issues that could be detrimental to the long-term success of the...
By: Kristine A. Tidgren April 7, 2015
In a blogpost yesterday, EPA Administrator Gina McCarthy and Assistant Secretary of the Army Jo-Ellen Darcy announced that their offices had sent a draft final version of what's been called the Waters of the United States (WOTUS) rule to the Office of Management and Budget on April 3. The controversial rule, which the EPA and the U.S. Arny Corps of Engineers have attempted to rebrand as the "Clean Water Rule," will now undergo an interagency review before becoming final. While refusing to speak...
By: Roger A. McEowen April 3, 2015
As the general economy continues to struggle, the farm economy will have another tough year. Crop prices have declined significantly from where they were a couple of years ago, and financial stress among producers is increasing. In the general economy, the March 2015 jobs report tells an awful tale – a record 93.175 million Americans 16 years old and older are not working, the January and February jobs numbers were dramatically revised downward, and the Federal Reserve has cut its growth...
By: Kristine A. Tidgren April 2, 2015
On April 1, 2015, the United States Court of Appeals for the Sixth Circuit admonished the USDA for denying farm program benefits to a farmer and forcing him to “navigate a bureaucratic labyrinth,” all the while “demonstrat[ing] a disregard for its own regulations.” The Court made these statements while reversing a decision from the district court that supported wetlands and penalty determinations made by NRCS and FSA, both USDA agencies. The Court remanded the case to the agencies for further...
By: Kristine A. Tidgren April 1, 2015
April Fool's Day seems the appropriate time to highlight what's become a near daily mantra: beware of tax-related scams and schemes. Unfortunately, these warnings continue because the sophistication of the scammers is exploding. No longer is it merely the naive who are being sucked in by these scams. While many artless tactics remain (if you just wire this money to Nigeria by Friday...), the emerging scams come wrapped in a cloak of credibility. It's often difficult for even the wary to...
By: Kristine A. Tidgren March 30, 2015
The United States Bankruptcy Court for the Northern District of Iowa recently ruled in favor of the debtors in an adversary action brought by their bank. The bank argued that the debtors’ obligations under a promissory note and an agricultural security agreement should be excepted from discharge in their Chapter 7 bankruptcy under 11 U.S.C. § 523(a)(6). Under that provision, debt is excepted from discharge for “willful and malicious injury by the debtor to another entity or to the property of...
By: Kristine A. Tidgren March 27, 2015
USDA has just announced that owners and producers will have one more week to reallocate base acres or elect between Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). The new deadline for both activities is now April 7, 2015. This marks the second extension for owners to update their yield histories or reallocate base acres. Originally the deadline for this activity was February 27. On that date, however, USDA extended that deadline to March 31, which was also the deadline for...
By: Roger A. McEowen March 25, 2015
The drop in crop prices in recent months has introduced financial strain for some producers. Bankruptcy practitioners that we know are reporting an increase in clients dealing with debt workouts and other bankruptcy-related concerns. We will produce a technical article for TaxPlace on the debt discharge rules for farmers, but below is an outline of the basics. An important part of debt resolution is the income tax consequences to the debtor. Except for installment land contracts and CCC...
By: Roger A. McEowen March 24, 2015
The 2014 Farm Bill was enacted into law in early 2014. It contains the farm program rules that will govern participating farmers for the next five years. Under the new rules, the total amount of payments that an individual or entity can receive either directly or indirectly (except for a joint venture or general partnership) for any crop year is $125,000. Spouses are able to double that amount, and a separate limit applies to peanuts. Any amount received from forfeiting a non-recourse loan...
By: Kristine A. Tidgren March 23, 2015
The ACA "relief" saga continues. On Friday, March 20, after discovering more erroneous Form 1095-As, the Treasury Department issued "expanded" relief . In February, the Treasury Department issued "relief" to certain taxpayers who had filed their tax returns in reliance upon one of the estimated 800,000 incorrect Form 1095-As that had been issued by the federally-facilitated Marketplace. These incorrect forms had reported the premium amount for the second-lowest priced Silver plan for 2015, not...
By: Roger A. McEowen March 20, 2015
There have been numerous cases in recent years involving farmers who have been found to have violated a patent on seeds and had to pay a tidy sum as a result. One question came into us recently about whether a payment a farmer had to make to settle a claim concerning patented seeds that he illegally saved, replanted and also resold could be deducted. The tax code says that a taxpayer can deduct ordinary and necessary expenses that are paid or incurred in the tax year to conduct the taxpayer’s...
By: Roger A. McEowen March 19, 2015
We’ve received a lot of questions recently involving how to treat unharvested crops at death for tax purposes. It’s a great question. We’ll develop a technical piece for TaxPlace on the topic, but here we go over the basic issues that arise and the general rules. When an individual dies during the growing season, the tax treatment of the crop is tied to the status of the decedent at the time of death. Was the decedent a farmer? If the decedent was a landlord, what type of lease was involved...
By: Kristine A. Tidgren March 18, 2015
Readers interested in the new Des Moines Board of Water Works federal lawsuit may have followed another federal lawsuit last year, the "California egg case" as it was often called. These readers may be wondering, “What ever happened to that egg case?” The answer is that it’s still winding its way slowly through the federal court system. The status of Missouri v. Harris, No. 14-17111[i], which is pending in the 9th Circuit, is illustrative of the federal litigation process. It also suggests that...
By: Kristine A. Tidgren March 16, 2015
The Des Moines Board of Water Works Trustees has filed its complaint against the Supervisors of Calhoun, Sac, and Buena Vista Counties in their capacities as trustees of Iowa drainage districts. Among its many demands, the complaint, which was filed in the United States District Court for the Norther District of Iowa, asks the court to order the drainage districts to cease "all discharges of nitrate that are not authorized by an NPDES or state operating permit." In addition to claims under...
By: Kristine A. Tidgren March 13, 2015
The Iowa Utilities Board ruled this week that Dakota Access, LLC, substantially complied with Iowa law when it notified landowners of its plans to seek a permit to build an oil pipeline across their property. Because the legally-required newspaper notice erroneously stated that the pipeline would be buried under 60 inches of soil, instead of under 48 inches of soil (which is the actual plan), an environmental coalition (including the Sierra Club) challenged the validity of the notice in a...
By: Roger A. McEowen March 12, 2015
We had an interesting question come into the office recently. The question involved the tax treatment of a biofiltration system for a farmer. I wasn’t familiar with the concept so I did a little research to find out exactly what a biofiltration system is. Basically, biofiltration removes contaminates (such as nitrates) in water by metabolizing microorganisms as the water flows past. The biofilters are basically a buried trench with woodchips through which tile water flows before the water...
By: Kristine A. Tidgren March 10, 2015
As threatened in January, the Des Moines Board of Water Works Trustees voted today to proceed with a federal Clean Water Act (CWA) citizen lawsuit against the supervisors of three Iowa Counties. The DMWW will sue the supervisors of Sac, Buena Vista, and Calhoun Counties in their capacity as trustees for 10 Iowa drainage districts. The lawsuit will primarily allege that the drainage districts are discharging pollutants into waters of the United States without a permit in violation of the CWA....
By: Kristine A. Tidgren March 9, 2015
The legal wrangling over the validity of local ordinances seeking to stop the growing of Genetically Engineered Organisms (GMO) continues in Hawaii. At the center of the litigation is United States Magistrate Judge Kurren, who, last Thursday, ruled that a state court action seeking a declaration that a Maui County GMO ban is legally valid was properly removed to federal court. In Atay v. County of Maui, No. 14-00582, 2015 U.S. Dist. LEXIS 26951 (D. Hawaii March 5, 2015), Judge Kurren ruled that...
By: Kristine A. Tidgren March 6, 2015
State laws differ in the protections they grant to landowners facing eminent domain. In Iowa, for example, the Iowa Utilities Board can grant a company, such as a utility company, the right to condemn an easement through a private landowner's property if it finds that the proposed project would "promote the public convenience and necessity.” If the Board vests a company with the right of eminent domain, the landowner is forced to convey the easement. "Just compensation" is awarded, and the...
By: Kristine A. Tidgren March 5, 2015
Last fall, we fielded a number of calls at the Center from Iowa landlords whose tenants failed to make their rental payments on time. In most of these cases, the tenant was offered the right to make the yearly payment in two installments, one at the beginning of the lease term and the other six months later. It was the September payments these tenants failed to make, and the landlords were wondering about their legal rights. In some cases, their rights were minimal because they had failed to...
By: Roger A. McEowen March 3, 2015
A recent decision by the Illinois Court of Appeals involved a small farm that a town tried to zone out of existence. The case involved the town's ability to zone agricultural activities and the state's right-to-farm law. The plaintiff, a small town of 230 people, sued the defendants, a married couple, for violating a town ordinance which declared commercial farming within the town boundaries to be a nuisance. The defendants bought a 57-acre farm in north-central Illinois, six acres of which...
By: Kristine A. Tidgren March 2, 2015
In a last-minute announcement, the IRS has declared that farmers waiting for a corrected 1095-A will have until April 15 to file their returns and pay their taxes. If they file Form 2210-F along with their return, the penalty for failure to pay quarterly estmated tax will be waived. Last week we learned that the Health Insurance Marketplace sent out about 800,000 incorrect 1095-A Forms to taxpayers. Apparently, some states with exchanges, including California, did the same thing. These forms...
By: Kristine A. Tidgren February 27, 2015
As we near the end of February, several key Farm Program deadlines are looming. Today (February 27, 2015) was supposed to be the last day that a landowner could update crop base acres and payment yields. Secretary of Agriculture Tom Vilsack, however, has just announced that this deadline has been extended to March 31, 2015. This is a decision that landowners, not tenants, must make. Producers (tenants in the case of a cash rent), on the other hand, must also elect by March 31, 2015, which...
By: Kristine A. Tidgren February 25, 2015
Iowa Governor Branstad signed S.F. 257 into law today, raising the Iowa excise tax on fuel for motor vehicles (including gasoline and diesel fuel) by 10 cents per gallon. Iowans will likely face the increase by Sunday, the first day of the first month following the enactment of the law. The increase, the first one in Iowa since 1989, is expected to raise one billion dollars over five years to improve Iowa's aging roads and bridges. The bill, which passed the House by a vote of 53-46 and the...
By: Kristine A. Tidgren February 24, 2015
We learned late last week that Healthcare.gov sent out about 800,000 incorrect 1095-A Forms to taxpayers. Apparently, some states with exchanges, including California, did the same thing. These forms incorrectly reported the premium amount for the second-lowest priced Silver plan from 2015, not 2014. This information is required to calculate the amount of the premium tax credit to which the taxpayer was entitled in 2014. Using the wrong Silver plan premium amount means calculating the wrong...
By: Kristine A. Tidgren February 23, 2015
A recent Iowa Court of Appeals decision should alert landlords of all kinds to their potential premises liability to third parties. Although the basic Iowa rule is that a lessor is not liable for injuries occurring after a lessee has taken possession of the property, there are a number of exceptions to the rule. In this case, the court found that the corporate landlord did have a duty of care toward the third party because it had (1) retained some control over the property and (2) contractually...
By: Kristine A. Tidgren February 19, 2015
I'm not trying to sound ungrateful for the much-needed guidance we received from IRS yesterday in Notice 2015-17. Relief from penalties, even if limited, is always welcome. But next time, I would prefer more actual guidance and not just more ad hoc penalty relief. This winter was nearly unbearable for many tax professionals with small business clients because no one had any idea how to guide them with respect to illegal plans that had continued into 2014. And it seems that the majority of such...
By: Kristine A. Tidgren February 18, 2015
When I was in journalism school, my professors had a policy that if you spelled a name wrong in a story, you flunked the assignment. The Iowa Court of Appeals recently ruled that if you describe the wrong property in your quiet title petition, you get your case dismissed. The plaintiff is a company that frequently purchases properties at tax sale auctions. In this case, the company purchased the defendant’s tax sale certificate from another company, which had served a notice of redemption upon...
By: Kristine A. Tidgren February 16, 2015
The FAA released proposed rules on February 15, 2015, that would, if implemented, finally open the door for the use of small unmanned aircraift systems (UAS) in agriculture and other industries. Although the rule is not in its final form and does not authorize the immediate use of UAS, it is the first regulatory step toward acceptance and integration of the technology that has outpaced its necessary regulatory framework. The proposed rule, which only applies to UAS weighing less than 55 pounds...
By: Kristine A. Tidgren February 14, 2015
Rock Island Clean Line (RICL) is seeking a franchise from the Iowa Utitlies Board (IUB) to build a high voltage direct current line across Iowa. The line would transport wind energy generated in northwest Iowa to Illinois. It would cross 16 Iowa counties and 1,540 parcels of land, impacting 2,295 different owners. Last December, RICL filed its second motion asking the IUB to split the necessary hearing into two. At the first hearing, the IUB would consider the question of whether to grant the...