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Update! On January 23, 2025, the US Supreme Court granted the application to stay the injunction while the case proceeds through its appeal. Stay tuned.

The 2018 Farm Bill (Agricultural Improvement Act of 2018) has been temporarily revived. On December 21, 2024, Congress enacted the American Relief Act of 2025, P.L. 118-158, which averted a government shutdown and extended the Farm Bill for the second time in two years. This extension allows programs generally to continue through September 30, 2025, but extends commodity programs through the 2025 crop year.

Recent hurricanes have caused widespread destruction to farms throughout the southeast resulting in damage and destruction of assets and loss of income. Several USDA programs, including disaster programs and crop insurance, are available to impacted producers. USDA is implementing program flexibilities in the form of extended deadlines and waivers of certain program requirements to simplify processes and expedite the distribution of funds.

Time is running out to avoid automatic renewal of a 2024 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 and conditions for another year. If notice is sent by mail, that means mailing the notice, by certified mail, before September 1.

The case is Schwarz v. IRS, T.C. 2024-55 (U.S. Tax Court May 13, 2024).   

On August 28, 2024, the Iowa Utilities Commission granted Summit Carbon Solutions, LLC, a hazardous liquid pipeline permit. The company cannot begin construction until the authorities in South Dakota and North Dakota grant their approval for the project. (Note: the Iowa Legislature changed the name of the Commission from the Iowa Utilities Board, effective July 1, 2024).

Many Iowans have been impacted by recent severe storms.  This post summarizes relevant notices and relief issued by IRS, FEMA, and the Iowa Department of Revenue.

On June 4, 2024, the U.S. Supreme Court issued a unanimous opinion holding that a corporation’s obligation to use life insurance proceeds to redeem a decedent’s shares did not offset the value of the life insurance when valuing the shares for estate tax purposes. [Connelly v. U.S., No. No. 23–146 (U.S. Sup. Ct. June 4, 2024)].

On April 19, 2024, the Iowa Supreme Court reversed a decision from the Iowa Court of Appeals and ruled that shareholders of a family farm corporation did not prove their breach of fiduciary duty claims against their father and brother. Hora v. Hora, No. 22-0259 (Iowa S. Ct. 2024) provides a good review of the duties and obligations of corporate directors in a family business. It also serves as a sober reminder of how easily family disputes can arise.

As March 1 approaches, we review the estimated tax rules for farmers.

Generally, self-employed taxpayers are required to make quarterly estimated tax payments or pay a penalty. IRC § 6654(e)(1). A special rule applies to the payment of estimated tax by individuals who are “farmers” or “fishermen.”  This special rule protects farmers—whose income is often unpredictable and sporadic—from the burden of attempting to calculate and make quarterly estimated tax payments. IRC § 6654(i).

In two separate lawsuits, several advocacy groups challenged Iowa’s Farm Trespass law and Trespass Surveillance statute. In both cases, a judge from the Southern District of Iowa previously held that the law violated the First Amendment and granted summary judgment in favor of the plaintiffs. Animal Legal Defense Fund v. Reynolds, 591 F.Supp.3d 397 (S.D. Iowa 2022); Animal Legal Defense Fund v. Reynolds, 630 F.Supp.3d 1105 (S.D. Iowa 2022).

The Eighth Circuit Court of Appeals released two separate opinions on January 8, 2024, and reversed the district court’s decisions, ruling that both statutes passed intermediate scrutiny and were, thus, constitutional. The cases are Animal Legal Defense Fund v. Reynolds, No. 22-1830, (8th Cir. Jan. 8, 2024) and Animal Legal Defense Fund v. Reynolds, No. 22-3464 (8th Cir. Jan. 8, 2024).

On December 21, 2023, IRS announced a Voluntary Disclosure Program (VDP) through which eligible employers may repay 80 percent of the employee retention credit (ERC) to which they were not entitled and avoid civil litigation, penalties, and interest.  IRS initiated this program in response to myriad fraudulent ERC claims, many filed by promoters who aggressively marketed this program to employers. Employers who received improper ERC payments have until March 22, 2024, to submit applications to participate in the VDP.

On September 8, 2023, the Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Army Corps) published a revised definition of “waters of the United States” or WOTUS. 88 FR 61964. To conform with the U.S. Supreme Court’s recent Sackett v. EPA, 143 S. Ct. 1322 (2023) ruling, the agencies made various changes including the removal of the “significant nexus” standard and amending the definition of “adjacent.” The new rule went into effect September 8, 2023. Because the revision was required to make the Rule comply with the Sackett decision, no notice and opportunity for public comment was necessary.

A commercial fishing business harvested shrimp by dragging nets along the ocean floor. The nets would trap other marine animals in addition to the shrimp. The fishermen would throw this “bycatch” back into the ocean. A conservation group brought a citizen-suit under the Clean Water Act (CWA) claiming that the company violated the CWA by 1) disturbing the sediment when it dragged nets along the ocean floor and 2) throwing the bycatch back into state waters bordering the Atlantic Ocean. The district court granted the fishing company’s motion to dismiss. On appeal to the Fourth Circuit Court of Appeals, the court affirmed.

On May 25, 2023, the U.S. Supreme Court significantly narrowed the definition of “waters of the United States.” Sackett v. EPA, No. 21-454 (2023). This case marks a decided victory for the Sacketts, an Idaho couple who wished to build a house on property the EPA found to contain federal wetlands. Notably, all nine Justices agreed that the agencies had gone too far in finding that the Sacketts’ property was subject to Clean Water Act (CWA) jurisdiction.

A recent case from the Iowa Supreme Court highlights the importance of carefully completing and reviewing beneficiary designations for IRAs and other retirement accounts. After acknowledging that there was “puzzling language” in the beneficiary designation before it, the Court ultimately determined that it must enforce the agreement based upon what it said, not based upon what the owner may have intended.

As the 2023 filing season begins, taxpayers and their preparers must sort through new guidance and rules to determine their requirements for the 2022 tax year. This post details 10 key considerations for these returns.

On December 16, 2022, the North Carolina Supreme Court denied an appeal claiming that the state’s Right to Farm Act was unconstitutional. Previously, the North Carolina Court of Appeals had granted the State’s motion to dismiss under the Federal Rules of Civil Procedure Rule 12(b)(6). Rural Empowerment Ass’n for Cmty. Help v. North Carolina, 2021 WL 6014722 (N.C. App. Dec. 21, 2021).

The National Bioengineered Food Disclosure Standard law requires all bioengineered food to disclose its bioengineered status to consumers through “text, symbol, or electronic or digital link.” 7 U.S.C. § 1639b(b)(2)(D). The USDA, through the Agricultural Marketing Service (AMS), promulgated the National Bioengineered Food Disclosure Standard rule in 2018 .A group of retail stores and food advocacy groups brought suit in the Northern District of California claiming that the regulations violated the Administrative Procedure Act. A federal judge agreed and found that the USDA failed to comply with the disclosure statute’s directive to “provide additional and comparable options” to ensure that consumers could access the electronic disclosure.

On August 24, 2022, IRS issued broad penalty relief to most taxpayers who filed 2019 and 2020 returns late. The relief, provided in IRS Notice 2022-36, applies to failure to file (not failure to pay) penalties, as well as some late information return penalties. For the most part, the relief is automatic.

On August 23, 2022, the Iowa Department of Agriculture and Land Stewardship (IDALS) announced that the court-appointed receiver for B & B Farm Store Inc., a grain dealer and warehouse operator from Jesup, Iowa, had consented to a voluntary revocation of its Iowa warehouse and grain dealer licenses.

On June 30, 2022, the Iowa Supreme Court, in a 4-3 decision, overruled 18-year-old precedent to find that Iowa’s right to farm statute, Iowa Code § 657.11, does not violate the inalienable rights clause of the Iowa Constitution. This decision generally restores statutory immunity from nuisance lawsuits seeking special damages for many animal feeding operations. Garrison v. New Fashion Pork LLP, No. 21–0652 (Iowa 2022).

On March 22, 2022, the Director of the Iowa Department of Revenue joined the IRS in granting estimated tax penalty relief to qualifying farmers who did not file their 2021 returns and pay their taxes by March 1, 2022. In Order 2022-1, Iowa waives the underpayment of estimated tax penalty for any qualifying farmer who files their 2021 Iowa income tax return and remits payment by May 2, 2022.

On March 1, 2022, Governor Kim Reynolds signed HF 2317 into law. The new tax law will reduce individual and corporate income tax rates, provide exemptions from Iowa tax for certain forms of retirement income--including retired farmer rental income--and scale back certain tax credits. 

IRS announced January 10 that it will begin accepting and processing 2021 tax year returns for individuals beginning January 24, 2022. IRS began accepting e-filed business returns on January 7, 2022.

IRS states in its announcement:

With high crop yields and robust commodity prices, many farmers are closing 2021 with more income than they expected. Likewise, input costs for 2022 are on track to reach record highs. In light of these trends, many farmers may have sought to even out income by deferring income from 2021 into 2022, by prepaying expenses in 2021, or by purchasing depreciable property. This article provides a summary review of special tax planning options that may be applied when filing 2021 returns.

We frequently receive questions about depreciating and expensing business vehicles. This post provides a brief summary of the general rules for 2021.

Update: USDA unveiled the Emergency Livestock Relief Program (ELRP) and Emergency Relief Program (ERP) in April and May of 2022.

On September 30, 2021, President Biden signed a continuing resolution into law. This new law, intended to temporarily fund the government through December 3, 2021, also contains provisions to provide new retroactive disaster relief to some farmers impacted by the 2020 derecho and other weather events. 

As many taxpayers are working to finalize extended returns, many in Congress are working to finalize language for tax reform legislation. Here we provide a brief update on the status of tax reform and what we may expect in the next several weeks.  

The American Rescue Plan Act of 2021 (ARPA), Pub L. No. 117-2, significantly enhanced the availability of the Affordable Care Act’s (ACA) premium tax credit (PTC) to make healthcare acquired on the ACA’s Health Insurance Marketplace more affordable for 2020, 2021, and 2022. These changes could mean significant savings to taxpayers purchasing healthcare coverage on the Marketplace. Because many farmers and ranchers are self-employed or owners of small partnerships or corporations for which insurance plans may be costly, they may benefit from purchasing insurance on the Marketplace.

On August 16, 2021, the Ninth Circuit brought closure to long-standing wetlands litigation between Idaho property owners and the Environmental Protection Agency (EPA). Despite the EPA’s intent to no longer pursue enforcement action, the court held that the case was not moot and that the property consisted of wetlands under the “significant nexus” test.

On August 10, 2021, the United States Court of Appeals for the Eighth Circuit considered the constitutionality of Iowa’s 2012 “Agricultural Production Facility Fraud” law (2012 law), sometimes called an “ag-gag” law. The court reversed a 2019 district court decision and upheld the constitutionality of the portion of the law providing criminal penalties for gaining access to an agricultural production facility using false pretenses. Iowa Code § 717A.3A(1)-(2).

On August 19, 2021, the United States Court of Appeals for the Tenth Circuit affirmed that three subsections of the Kansas Farm Animal and Field Crop and Research Facilities Protection Act (the Act) were unconstitutional. The Act provides criminal sanctions for using fraud or deception to obtain consent to engage in various activities at an animal facility with the intent to damage the facility.

We have been seeing renewed interest and activity associated with a market for carbon credits, in particular credits created through new land management and conservation practices farmers implement on their land. Last week, we participated in a webinar providing information on this emerging topic. You can watch the webinar here. Topics include:

On July 26, 2021, the District Court of Hawaii considered whether the County of Maui must obtain a National Pollution Discharge Elimination System (NPDES) permit for releasing pollutants into injection wells a half a mile from the ocean. On remand, this district court, using factors set forth by the Supreme Court, held that the circumstances surrounding how the Lahaina Wastewater Reclamation Facility (LWRF) conveyed pollutants through groundwater was the “functional equivalent of a discharge.”

On June 30, 2021, IRS issued Rev. Proc. 2021-14, which details special elections and revocations available to taxpayers with farming loss net operating losses (NOLs) in 2018, 2019, and 2020. The guidance was necessary to instruct taxpayers on how to comply with a special legislative fix for farming loss NOLs implemented by the Consolidated Appropriations Act, 2021 (CAA), enacted December 27, 2020.

On Friday, June 25, the United States Supreme Court issued an opinion determining the availability of an extension to the small refinery[i] hardship exemption within the renewable fuel standards program (RFS).

On May 28, 2021, the Treasury Department released the "Green Book," a description of revenue proposals within President Biden’s fiscal year 2022 budget.

The Center for Agricultural and Rural Development recently posted this policy brief discussing the possible implications of the Growing Climate Solutions Act of 2021 on the carbon market for agriculture:

The First Legal Step for an Agricultural Carbon Market is in the Growing Climate Solutions Act of 2021

After several years of litigation flowing from dicamba drift damage to cotton, soybeans, and other crops,[i] Monsanto (owned by parent company Bayer) agreed to enter into a Soybean Producers Master Settlement Agreement. This December 16, 2020, Agreement provides a mechanism, apart from litigation, for eligible producers to resolve dicamba-related soybean injury claims.

On March 29, 2021, the Iowa Department of Revenue announced a filing and payment extension for individual taxpayers, from April 30, 2021, to June 1, 2021.  In the same notice, IDOR provided instructions for reporting unemployment compensation on 2020 returns.

By a vote of 92-7, the Senate today passed HR 1799, the PPP Extension Act of 2021. The House had passed this bill on March 16, 2021, by a vote of 415 to 13. This new provision, once signed by President Biden, will extend the time for lenders to submit PPP loan applications to the SBA from March 31, 2021, through May 31, 2021. It will also allow the SBA to process these applications through June 30, 2021.

On March 17, 2021, IRS issued the following news release:

The U.S. Department of the Treasury and the Internal Revenue Service announced today that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

Note: This post has been updated to include new guidance and forms published March 12 and March 18 at the bottom.

With tax software missing key updates and some important questions remaining unanswered, some farmers who did not pay estimated tax by January 15 may not be in a position to file their returns by March 1. Although missing the March 1 deadline may subject these farmers to an underpayment of estimated tax penalty, April 15 remains the filing deadline for most individual taxpayers, including farmers. This post reviews the special estimated tax rules for farmers and the significance of the March 1 deadline.

Update: On March 11, the American Rescue Plan Act was signed into law. The new law extends the ERC through December 31, 2021, with some modifications to quarters 3 and 4. On April 2, IRS issued guidance as to the CAA expansion for quarters 1 and 2 of 2021. This guidance, Notice 2021-23, did not address the ARPA expansion.

On February 4, 2021, the Iowa Department of Revenue issued guidance on its nonconformity with the Consolidated Appropriations Act of 2021. Because Iowa generally has rolling conformity with federal tax law beginning with tax years 2020, the nonconformity guidance specifically applies to taxpayers with tax years that began in 2019.

Update: On the evening of December 27, 2020, President Trump signed the Consolidated Appropriations Act into law.

As October comes to an end, it may be helpful to review the Iowa Department of Revenue’s tax filing deadlines during this crazy year. A recent news release from IDOR details this information.

On October 27, 2020, the EPA announced that it had approved the applications of Bayer and BASF for new registrations of dicamba-based XtendiMax and Engenia for over-the-top use on dicamba-tolerant cotton and soybeans. It also approved Syngenta’s application for a label amendment to extend the December 20, 2020, expiration date for dicamba-based Tavium. These five-year registration decisions were issued under section 3(c)(5) of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

Late Thursday, October 8, the Small Business Administration issued a new Form 3508S forgiveness application and instructions promising simplified forgiveness for Paycheck Protection Program loans in the amount of $50,000 or less.

Many are reeling from the damage caused by the derecho which tore through the Midwest on August 10, 2020. Farmers lost grain bins, outbuildings, crops, and much more. Clean up is ongoing with hundreds of trees uprooted and strewn across lawns. This post provides an overview of some of the tax issues associated with the destruction, clean-up, and rebuilding.

On August 28, 2020, IRS issued Notice 2020-65, 2.5 pages of guidance related to the President’s August 8 payroll tax deferral Memorandum (Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster). Based upon the risk this new program would impose upon employer and employee alike, it appears likely that many employers will not participate in this program.

A recent case from the Iowa Court of Appeals illustrates how redemption works after a farm foreclosure and warns debtors that they must strictly follow the letter of the law to redeem their land.

After a judicial foreclosure in Iowa, a debtor can generally redeem or buy back their agricultural land within one year after sale. See Iowa Code §§ 626.95, 628.3. That right may be assigned to another party.

As of September 2, no progress has been made on a stimulus package. Congress returns from the Labor Day Recess on September 8.

Called the 2020 Omnibus Bill, HF 2641 makes a number of changes to Iowa tax law. Signed into law by the Governor on June 29, 2020, the primary intent of the bill was to streamline the administration of Iowa’s tax laws and coordinate their interaction with federal law.

Update: On July 4, 2020, President Trump signed S.4116 into law. This new law allows new PPP loans to be made through August 8, 2020. The law does not allow businesses that have already obtained a loan to receive a second one.

On Friday, June 19, IRS issued Notice 2020-50, expanding the definition of “qualified individuals” eligible for coronavirus-related distributions from eligible retirement accounts. The Notice also provides detailed guidance for coronavirus-related distributions and expanded plan loans made available by the CARES Act.

On June 8, 2020, IRS and Treasury issued proposed regulations (REG-109755-19) that will (once they become final) open the door for those involved with health care sharing ministries and direct primary care arrangements to realize tax savings for the cost of these programs.

Update: Late on June 8, the U.S. EPA issued a final cancellation order for the registrations of the three herbicides impacted by the Ninth Circuit's ruling. The cancellation order allows for the limited sale and use of  existing stock of these herbicides through July 31, 2020, allowing farmers to complete their spraying.

On May 29, 2020, Katie Kramer and Justin Muir, agricultural program specialists from the Iowa USDA-FSA office, and ISU agricultural economist Chad Hart joined us for a webinar on the Coronavirus Food Assistance Program. The panel reviewed eligibility information and the application process for the new program and answered a number of producer questions. We were grateful to have them present the program!

A replay of the webinar is available here.

Update: Late on May 13, Treasury extended the deadline for repaying a PPP loan without review from May 14 to May 18.

Note: On May 4, SBA began accepting applications for EIDL advances from agricultural businesses only.

It’s official. The President signed H.R. 266, the Paycheck Protection Program and Health Care Enhancement Act, into law today. This law provides another opportunity for some small businesses, including agricultural producers, to get in line for a potential loan to help them through the next few months.

The question before the U.S. Supreme Court was whether the Clean Water Act requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, in this case, groundwater. Many had hoped the Court’s answer to this question would clarify longtime ambiguity under the CWA. But given the complexity of the issue, that was not to be. 

Note: This case was reversed on appeal on 11/25/2020.

A bankruptcy court recently ruled in a Chapter 12 case that federal and state taxing authorities do not have the right to offset a refund with tax debt stripped of its priority by 11 U.S.C. § 1232. This was a court’s first opportunity to rule on this question since the passage of the Family Farmer Bankruptcy Clarification Act of 2017. The case was In re DeVries, No.19-00181 (Bankr. N.D. Iowa April 28, 2020).

Update: On June 29, IRS stated via FAQ that taxpayers will have until July 15, 2020, to file a Form 1139 or Form 1045 that otherwise would be due June 30. This is because of the general extension relief provided by Notice 2020-26.

On April 9, 2020, IRS issued Notice 2020-23, which significantly expands the deadline relief for filings and payments earlier provided through Notices 2020-18 and 2020-20.

Filings and Payments

This broad-sweeping relief now applies to taxpayers with a filing or payment deadline on or after April 1, 2020, and before July 15, 2020, for the following.

Update: On April 9, 2020, IRS issued Rev. Proc. 2020-24, providing guidance to taxpayers with net operating losses that are carried back under the CARES Act.

The Senate has been discussing provisions contained in what's being called the Coronavirus Aid, Relief, and Economic Security (CARES) Act or Phase 3 Coronavirus legislation. The proposal would include $2 trillion of spending. Full text of the legislation has not been publicly released, but Chairman Grassley from the Senate Finance Committee has released a summary of provisions under consideration.

Update: The Department of Labor has created a webpage devoted to this new law.

Update: After Iowa issued its notice, the IRS issued a notice extending the filing deadline for federal returns to July 15.

Eligible producers and crop share landlords should finally begin receiving interim payments from the Syngenta settlement this month. On February 28, 2020, the U.S. District Court for the District of Kansas authorized the claims administrator to make interim payments to class members that have:

On February 21, IRS issued a long-awaited revenue procedure, IRS Rev. Proc. 2020-13, to allow farmers who had elected out of UNICAP prior to the Tax Cuts and Jobs Act to revoke that election if they qualify as a small business taxpayer. Owners of orchards and vineyards, in particular, have been waiting for this revenue procedure since the Tax Cuts and Jobs Act went into effect.

On January 23, 2020, the Environmental Protection Agency (EPA) and the U.S. Department of the Army signed the final Navigable Waters Protection Rule (NWPR), a rule that defines “waters of the United States” or the jurisdictional scope of the Clean Water Act (CWA). The NWPR will be effective 60 days from its publication in the Federal Register.

As we move into 2020, we're dedicating this post to reviewing important agricultural law developments from the past year. Most of these issues continue to evolve, and we look forward to providing updates as they occur. Happy new year!

On December 20, 2019, President Trump signed into law the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). The SECURE Act, originally passed by the House last May, was inserted into the Further Consolidated Appropriations Act, 2020, HR 1865, a massive spending bill approved by a vote of 297-120 in the House and 71-23 in the Senate. The SECURE Act makes significant changes to many long-time retirement plan rules.

The $1.4 trillion year-end spending package passed by Congress and signed into law on December 20, 2019, contains a number of provisions impacting taxpayers. The package, including the Consolidated Appropriations Act, 2020, H.R. 1158, and the Further Consolidated Appropriations Act, 2020, HR 1865, will keep the government running through September 2020.

On October 29, 2019, USDA issued an interim final rule for the establishment of a Domestic Hemp Production Program. The rule implements provisions within the 2018 Farm Bill[i]  authorizing the production and transportation of hemp. The rule is effective from October 31, 2019, through November 1, 2021. USDA is accepting comments through December 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.

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 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).

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.

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.

Update: President Trump signed this bill into law on August 23,2019.

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.

The United States Supreme Court Supreme Court issued a decision on June 21, 2019, holding that landowners are no longer effectively required to exhaust state remedies before filing Fifth Amendment federal takings claims in federal court. Knick v. Township of Scott, Pa., No. 17-647 (U.S. 2019). This case, which overruled precedent established in 1985, broadens the options available to landowners who claim that a state or municipality has taken their property without just compensation.

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.

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.”

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 agencies.

Note: On June 10, USDA issued this Q & A.

On May 31, CRS published a report outlining the proposed trade aid package.

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.

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 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.

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 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.

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 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 subsequent offense.

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?

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. 

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 revive and extend 26 temporary tax breaks that expired at the end of 2017. It is unclear whether such legislation may be addressed in the near future. In the meantime, taxpayers are filing 2018 returns without the benefit of the following tax provisions:

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. 

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.

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.

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!

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.

President Trump signed the 2018 Farm Bill into law on December 20, 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.

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.

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.

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.

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.  

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:

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.

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.

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.

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.

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.

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 April 12, 2018, the United States Court of Appeals for the Fourth Circuit vacated a district court’s judgment and held that a discharge that passed from a point source through groundwater to navigable waters could support a Clean Water Act (CWA) claim. The Fourth Circuit in Upstate Forever v. Kinder Morgan Energy Partners, L.P.,[i] became the second federal court of appeals to make such a ruling in 2018.

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.

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." 

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.”

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 entities cost recovery altogether.

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 construct the turbines, and the Board denied the application.

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.

Update: Governor Reynolds signed SF 512 into law on January 31, 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.

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!

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.

The Iowa Court of Appeals recently affirmed a judgment in favor of a borrower, against his banker, for claims of fraudulent misrepresentation and nondisclosure.

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 21^st Century Cures Act. The law removes from the definition of “group health plan” reimbursement arrangements that follow the law’s requirements.

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.

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.

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.

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.

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 20,000 Minnesota farmers seeking $400 million in damages.

Update: On February 23, 2018, the Iowa Supreme Court vacated this Court of Appeals decision and reinstated the district court's judgment.

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 portability.

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.

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 exactly what happened in Summit Veterinary Services v. Tindle.

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).

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 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.

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.

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 pass with the approval of only 50 Republican Senators (the Vice President could cast the tie-breaking vote). It also means that the BCRA cannot include provisions that do not change the level of spending, revenues, or the debt limit. In other words, the provisions have to be budget related, and they cannot increase the deficit for any period beyond the budget reconciliation period (usually 10 years). These restrictions greatly limit the extent to which the bill can actually “repeal and replace” the ACA.

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 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.

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.

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%.

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.

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.

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.

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.

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.

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.

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.

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.

On February 10, 2017, Iowa Department of Revenue issued helpful documents to help preparers contend with nonconformity.

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.  

“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 producers and growers on the other.  

The Senate today overwhelming concurred with the House, sending the 21^st Century Cures Act to the President for signature. It is expected that President Obama will sign the bill into law. 

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 ahead, we'll begin to look at the details of various tax proposals.

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 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.

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.

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 key proposals, as they pertain to small businesses and farms.  

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

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.

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.

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.

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:

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?”

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.

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.

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.

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 acreage (less than 40 acres) where the only "agricultural activity" was one grazing horse.

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.

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.

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.

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

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 excavation company would be indemnified by the farming company that hired the work done.

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 the gift.

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.

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 their specific legal rights should consult with an attorney.

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 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.

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 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 defined under the statute as follows:

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 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 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.

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 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.

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 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.

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. County of Maui, No. 14-00582, 2015 U.S. Dist. LEXIS 26951 (D.

A recent opinion from the Iowa Court of Appeals reminds us of the importance of written plans for family farming businesses.

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.

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.

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.

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 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 applies only to real property or also to personal property. 

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 resided on the property. The brother had a remainder interest.    

Most U.S.

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 forecast to zero.  The labor force participation rate is at its lowest since 1978. 

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 separate fact from fiction in this new age.

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 producers to elect between ARC and PLC.

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 is not subject to the payment limit.   This only applies, of course if adjusted gross income is at

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. 

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.

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.

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.

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 landowner retains actual ownership in the property.

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 were within the town's boundaries.

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.

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 premium tax credit on Form 8962 and either overpaying or underpaying your tax bill.

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.

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.