The IRS announced relief today for a Catch-22 situation for farmers and fishermen. Normally, farmers and fishermen who choose not to make quarterly estimated tax payments are not subject to a penalty if they file their returns and pay the full amount of tax due by March 1. The problem is that most farmers must file Form 4562 (depreciation and amortization), and the IRS won’t be ready to accept that form until after March 1st because of the late passage of the “fiscal cliff” legislation. (Not only does farming equipment depreciate, but so do livestock and orchards.) Farmers and fishermen were put in an impossible situation.
The IRS recognized this, and stated in an email announcement today that there will be no penalty as long as the farmers and fishermen file by April 15, 2013. Farmers and fishermen will need to attach Form 2210-F, check the waiver box in Part I, Box A, and leave the rest of the form blank. (The taxpayers name and identification number should also appear at the top of the form.)
While this is not a big item for me–I have one client in farming–this will be big news for tax professionals elsewhere in the country.