August 2018
Introducing, Kitt Tovar
We are very excited to announce the addition of Katherine Tovar to our staff. Kitt is our new legal consultant focusing on agricultural law & policy. She has written several articles for our newsletter this month. Kitt earned her B.S. in Animal Science from Iowa State University and her J.D., with honors, from Drake University while completing certificates in Food and Agricultural Law and Legislative Practice. Kitt can be reached at kwtovar@iastate.edu or by phone at 515-294-5608.
An Update on North Carolina Nuisance Lawsuits
Many are closely monitoring a number of North Carolina nuisance lawsuits filed against Murphy-Brown a division of Smithfield Foods. Since April, juries have rendered three large verdicts against the hog integrator, the most recent verdict issued August 3. The defendant, Murphy-Brown, is a Delaware company and hog integrator that works with independent farmers and contract growers throughout twelve states. Twenty-six lawsuits were filed against Murphy-Brown beginning in 2014 by nearly 500 plaintiffs who lived near several Murphy-Brown operated hog farms in eastern North Carolina.
To continue reading, click here.
Seed Supplier Can't Collect Against Landowner
On August 15, the Iowa Court of Appeals affirmed a summary judgment in favor of a landlord, finding that a seed supplier could not recover where the customer was a custom farmer. This case highlights the need for written contracts over oral agreements.
To continue reading, click here.
August was a Big Month for Tax Reform Guidance
Proposed regulations issued to implement several key provisions of the Tax Cuts & Jobs Act were issued by Treasury and IRS in August.
199A Proposed Regulations
Treasury and the IRS released long-awaited 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 them until final rules are adopted. Read our summary of significant highlights from the proposed regulations.
Bonus Depreciation Proposed Regulations
On August 3, IRS issued proposed regulations, REG-104397-18, to detail how bonus depreciation (the additional first- year depreciation deduction) under IRC § 168(k) should work in light of changes made by the Tax Cuts and Jobs Act. PL 115-97. Read our overview of this guidance here.
Proposed Regs to Eliminate SALT Deduction Cap Workaround Have Broader Impact
On August 23, 2018, IRS issued REG-112176-18, proposed regulations intended to stop states from establishing charitable contribution/tax credit schemes to get around the new $10,000 limit on deductions for state and local taxes. The proposed regulations also reach some longstanding state credit programs designed to encourage charitable contributions for purposes such as school tuition. Read our summary of these proposed regulations here.
Notice 2018-70 Clarifies Definition of Qualifying Relative
On August 28, 2018, IRS issued Notice 2018-70 to clarify the definition of a “qualifying relative" for purposes of the $500 credit and head of household status. Specifically, the Notice provides that the reduction of the personal exemption amount to zero won’t be considered for purposes of the $500 credit and head of household filing status. Instead, the exemption amount for the application of these provisions will be treated as $4,150. Continue reading here.
USDA Issues Details of New Payment Program
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 purchase the unexpected surplus of affected commodites.
- The Trade Promotion Program is designed to restore lost markets and develop new export markets for U.S. farm products.
For more information on these new programs, particularly the Market Facilitation Program, click here.
Corporate Veil Pierced Where Owner was Sloppy with Finances
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 provides a good reminder to business owners that they must truly follow statutory requirements for maintaining a true business or they will not receive the protections of those laws.
To continue reading, click here.
Special thanks to our 2020-2020 Sponsors
Donate to CALT
As you know, our work at the Center is dependent on the fees generated by seminar registrations and gifts. If you would like to donate to further the Center's efforts, please contact our Program Administrator, Tiffany Kayser at tlkayser@iastate.edu or (515) 294-5217. You can also give online with a credit card. We thank you for your generous support.
Register for our Ag Law Seminar & Farm Tax Workshop
We hope you'll join us for our annual September Seminars September 20-21, 2018, at the Quality Inn & Suites in Ames, and online. Day One is our Agricultural Law Seminar, cosponsored with Iowa Farm Bureau and the Agricultural Law Section of the Iowa Bar. Day Two is our Farm Tax Workshop. Both days are packed full of great content detailing new laws and their impact on agricultural producers. Click here to more information or to register. We hope to see you there!
It's Time to Register for Tax School
We are very excited for our 45th Annual Federal Income Tax Schools! Our two-day program, which includes a comprehensive review of tax reform changes, is designed to prepare practitioners for the 2019 filing season. We hope you'll plan to join us at one of our two-day locations:
November 1-2, 2018 – Maquoketa, Iowa – Centerstone Inn and Suites
November 5-6, 2018 – Le Mars, Iowa – Le Mars Convention Center
November 7-8, 2018 – Atlantic, Iowa – Cass County Community Center
November 8-9, 2018 – Mason City, Iowa – North Iowa Area Community College
November 15-16, 2018 – Fairfield, Iowa – Fairfield Arts & Convention Center
November 19-20, 2018 – Waterloo, Iowa – Hawkeye Community College
December 10-11, 2018 – Ames, Iowa and Live Webinar – Quality Inn and Suites
For more information, click here.
