As most of you know, over the last couple of years the IRS has begun to attack the right of growers to defer payment for their crop to an ensuing tax year. While this practice is clearly allowed for regular tax purposes, the IRS has contended that it is not allowed for purposes of calculating the Alternative Minimum Tax (AMT).
Once the issue began to be clearly understood, agriculture’s friends in Washington prevailed upon the IRS to put a moratorium on pursuing this item until the end of 1997 to give Congress time to act to correct this unintended result of the 1986 tax act. We had advised our members and gin personnel to continue to do business as normal trusting and believing that this problem would get resolved by legislation this year.
The plan was to attach language to the big tax bill currently making its way through the Congressional process. However, as the House Ways and Means Committee began to look at that bill, the language which would have corrected our problem, language which had already attracted 170 cosponsors in the House as a stand-alone piece of legislation, had not been included in the initial bill presented to the committee.
Obviously, this was of grave concern to all of us who understood the import and the magnitude of the tax problems this was going to create. To make a long story short, thanks to some on-the-spot hard work by a lot of people, the needed language was ultimately added to the bill through an amendment passed by the Ways and Means Committee and now will move forward as part of the overall tax legislation. While the legislative process is far from complete, this initial step was vital in moving toward the goal of a final “fix.”
I particularly wanted you to know that important efforts were made by Congressman Larry Combest who represents the 19th Congressional District of Texas and Congressman Bill Thomas from Bakersfield, California, who serves on the Ways and Means Committee. These two gentlemen and their staff people took the lead in seeing that this problem was resolved, and without their efforts it is likely this success could not have been achieved. They have consistently been friends of agriculture, and cotton in particular, as they clearly demonstrated again here. I have voiced appreciation to them and encourage any of you who have opportunity to do likewise.
Also, the staffs of the National Cotton Council and the National Council of Farmer Cooperatives were instrumental in keeping the process moving in the right direction. We are fortunate to have these dedicated, talented people working for us full-time alongside our elected officials.
I wanted you to know that this important issue is “back on track” and to advise you as to some of the folks who worked hard to get it there. Maybe we can lay it to rest for good before too long. I hope so.