Iowa Public Television


IRS, USDA Crack Down on Wealthy Subsidy Recipients

posted on March 27, 2009


The Internal Revenue Service and the Agriculture Department are cracking down on millionaires who receive farm subsidies by mistake.

A report released last year shows that a sports team owner, a financial firm executive and 2,700 other millionaires were receiving farm payments even though they probably were ineligible. The Agriculture Department said they did not have access to IRS information that could have disqualified them.

Agriculture Secretary Tom Vilsack announced March 19th, that his department will now work with the IRS to verify the incomes of subsidy recipients. Those receiving government farm payments will be required to sign a separate form that will give the Agriculture Department access to IRS information about their income.

The report last year by the Government Accountability Office reviewed farm payments sent between 2003 and 2006. During that time, an individual or farm entity was ineligible for subsidy dollars if average adjusted gross income exceeded $2.5 million over three years -- unless 75 percent or more of that income came from farming, ranching and forestry.

According to the report, 2,702 recipients exceeded the $2.5 million and got less than 75 percent of their income from these activities. The payments to them totaled more than $49 million.

Wisconsin Rep. Ron Kind, a Democrat, has introduced legislation in Congress that would implement similar rules to those issued by the administration Thursday. Kind's bill goes further, however, to increase penalties for noncompliance. It would also require all applicants to be screened automatically, instead of asking producers to sign a waiver allowing the department to access their information. The new rules are part of an Obama administration effort to improve coordination between agencies and trim waste from departmental budgets.

The Department of Agriculture says it has already saved an estimated $25 million through a series of other cost-saving measures, including moving some programs from paper to online and cutting travel costs for employees.

Tags: agriculture government money news Tom Vilsack USDA