Still Time to Register for Entity Planning Seminar
There's still time to register for our July 12-13 seminar/webinar: Entity Planning in the Wake of the Tax Cuts & Jobs Act. The two-day event, held at the Quality Inn & Suites in Ames (and online) will provide tax professionals and those counseling small business owners with tools to assist them in entity planning decisions.
In addition to reviewing changes made by the new tax law, the session will review key steps and considerations for transitioning from one business form to another. We are hoping some IRC section 199A guidance may be issued by this time. If so, we will provide a first-look at its implications. If not, there's still plenty to study!
For more information, click here.
Can I File a Syngenta Claim on Someone Else's Behalf?
We've received a number of questions regarding who can file a Syngenta claim on another person's behalf. The settlement materials state that only a "representative claimant" can file a claim in the place of someone else. A representative claimaint is an authorized representative of a deceased, minor, legally incapacitated, or incompetent Producer Class Member, as ordered by a court or other official of competent jurisdiction under applicable state law. In other words, unless the producer is deceased, a minor, or incompetent, he or she must file his or her own claim.
Farm managers do not have the authority to file claims on behalf of their competent clients, even if they have an FSA-211 power of attorney form. If an estate is still open for a deceased producer and the estate has its own TIN number, the estate representative is authorized to file the claim in the name and TIN of the estate. In such a case, the representative is not considered a representative claimant of the producer, but is directly acting for the estate.
Remember, the claims process is open to all corn producers (between the years 2013 and 2018), including landlords whose rent was tied to yield and/or price. All claims must be filed by October 12! For more information on filing claims in the Syngenta settlement, click here.
U.S. Supreme Court Says States Can Require Retailers Without Physical Presence to Collect Sales Tax
It is a question that has come before the United States Supreme Court on two prior occasions: When can a state require an out-of-state seller to collect and remit sales tax? The Court has twice found that the collection obligation turned on whether the seller had a “physical presence” in the state. But, this time, the answer was different. Recognizing that the Court’s prior decisions got it wrong, the Court in South Dakota v. Wayfair, Inc., No. 17-494 (U.S. Sup. Ct. June 21, 2018), overruled five decades of precedent to open the door for states to require out-of-state sellers to collect and remit sales tax, even when they do not have a physical presence in the state. This opinion is a game changer.
Note: On June 25, the Iowa Department of Revenue responded to the Wayfair ruling by stating that the provisions of tax reform, SF 2417, extending sales tax collection obligations to larger online sellers will be effective January 1, 2019. They will not apply retroactively. "The Wayfair ruling does not change the effective date of SF 2417 and the Iowa Department of Revenue will not seek to impose sales tax liability for periods prior to January 1, 2019 for retailers and marketplaces whose only obligation to collect Iowa sales tax comes from these new laws."
Continue reading here.
Iowa Supreme Court Issues Key Ag Nuisance Ruling
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 the three-prong test set forth in Gacke v. Pork Xtra, L.L.C., 684 N.W.2d 168 (Iowa 2004). Under the new ruling, district courts must conduct extensive fact-finding before ruling on the constitutionality of legislative-granted immunity for a defendant in nuisance case filed against an animal feeding operation. The Court declined the plaintiffs’ invitation to declare the right-to-farm statute facially unconstitutional.
The defendants in Honomichl include the owner of two animal feeding operations in Wapello County and the integrator and operator of the hogs finished in those units. The units were constructed in compliance with Iowa Department of Natural Resources permits and enhanced set-back requirements. Plaintiffs are neighboring homeowners who purchased their properties before the units were built. The closest plaintiff to one unit is 3,527 feet away, and the closest plaintiff to the second is 3,802 feet away. The units began their operations in the late summer of 2013. Several months later, plaintiffs filed their initial nuisance action. Since that time, multiple cases have been filed against these defendants and the composition of those cases has continued to change. Significantly, the plaintiffs were not seeking nuisance damages for diminished property values, only special damages for loss of use and enjoyment. The defendants sought summary judgment, arguing that Iowa Code § 657.11(2) granted them immunity from such damage suits. The plaintiffs argued that the statute was unconstitutional, as applied to their case. The district court granted the plaintiffs partial summary judgment on that issue, and the Iowa Supreme Court agreed to hear the interlocutory appeal.
To continue reading, click here.
Minority Shareholders in Farm Corporation Failed to Show Oppression
On June 20, 2018, 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 of a minority shareholder by paying no return on shareholder equity while declining the minority shareholder's repeated offers to sell shares for fair value."
The farming corporation, which was established in 1977, had four remaining shareholders at the time the action was filed. Two sibling shareholders filed their lawsuit against their brother, their father, and the farming corporation (operated as an S corporation), seeking to have the corporation dissolved as a consequence of minority shareholder oppression. Although, each stockholder held 170 shares in the corporation, the father retained the majority of voting shares. As such, he retained control of the corporation. The defendant brother was the on-farm heir who was employed to run the farming business. He lived on the farm in a home provided by the corporation as part of his compensation.
The plaintiffs filed an action alleging minority shareholder oppression. They contended that they had not received a fair return on their ownership in the corporation, even though they had made capital contributions. The action was heard by the business court, which ruled in favor of the defendants. The plaintiffs appealed, and the Iowa Court of Appeals affirmed.
Continue reading here.
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 email@example.com or (515) 294-5217. You can also give online with a credit card. We thank you for your generous support.
It's a "Postcard"...With Lots of Attachments
IRS officially unveiled its draft 2018 Form 1040 on June 29, 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 that the new Form 1040 uses a “building block” approach, in which the tax return is reduced to a simple form, which can be supplemented with additional schedules if needed. Taxpayers with straightforward tax situations, the IRS says, would only need to file the new 1040 with no additional schedules. It appears, however, that most taxpayers will need to file at least one of six new schedules, to report information that used to be captured on the Form 1040 itself.
Continue reading here.
New Tax Law Resources
Don't forget we are maintaining a page where you can quickly monitor developments related to the Tax Cuts & Jobs Act. We are watching for key guidance soon! You can access the resources page here.
Missed a Webinar or Seminar?
No worries! That's what TaxPlace is for. For a one-year subscription of $150, you can have access to replays all of our seminars and webinars. We have a number of other useful resources and tables as well. Here are highlights from June:
June 20 The Scoop - June 20
June 6 The Scoop - June 6
The Center for Agricultural Law and Taxation does not provide legal advice. Any information provided on this website is not intended to be a substitute for legal services from a competent professional. The Center's work is supported by fee-based seminars and generous private gifts. Any opinions, findings, conclusions or recommendations expressed in the material contained on this website do not necessarily reflect the views of Iowa State University.