D.C., September 8, 2006 – Cattle producers impacted by the nation's ongoing drought will have
additional time to purchase replacement property for livestock they were forced
to sell, according to a notice released by the Internal Revenue Service.
The announcement comes in response to efforts by the National Cattlemen's Beef
Association (NCBA) and letters from key senators to Treasury Secretary Henry
Paulson requesting that he extend the tax relief for ranchers who were forced
to sell off large portions of their breeding stock as a result of drought
conditions during 2002.
“In the past, NCBA worked to support the American Jobs Creation Act which contained
a provision to amend Section 1033 (e) of the Uniform Tax Code,” explains Jason
Jordan, manager of legislative affairs for NCBA. “This amendment extended the
tax deferment period for weather-related sales of livestock – known as involuntary
conversions – from two years to four years. The language also gives the Secretary
of the Treasury authority to further extend the deferral period.”
Extending the tax deferment period will allow producers to replace breeding
animals they were forced to sell at a more feasible time. “Some producers
are coming to the end of their four-year replacement period,” says Jordan. “But
this announcement means that ranchers still dealing with horrific effects
of the drought will not have to restock their herds until one year after the
official end of their drought conditions.”
IRS Notice 2006-82 explains how a taxpayer can determine whether additional
time is available. In addition, the IRS said it plans to publish a list of
counties that experienced exceptional, extreme or severe drought for the 12-month
period ending August 31, 2006.
“NCBA is dedicated to common-sense tax law,” says Jordan. “This IRS announcement
will provide relief not only for producers who have already been forced to liquidate
herds, but also for any producer who is currently faced with selling livestock
as a result of drought.”
Member-driven policy of NCBA supports drought and disaster relief for American
beef producers when they are hit by unforeseen natural disasters, and NCBA
will continue its fight for meaningful drought relief.