IRS Issues Minimal FAQs on USDA Discrimination Financial Assistance Program.

The IRS issued Three FAQs on the USDA Discrimination Financial Assistance Program. It told us what we already knew but most farmers will likely not like the conclusions.

Photo by Stephen Radford on Unsplash

We don’t know how many times we get asked about certain USDA programs being non-taxable. In almost all cases, these payments are always taxable and most of the farmers get upset with it being taxable. However, the Code is very specific that all receipts are taxable unless there is a specific Section of the Code that indicates it is not taxable.

The USDA Discrimination Financial Assistance Program was enacted as part the 20222 Inflation Reduction Act and provided funds to farmers who may have been discriminated against. The program closed to claims as of January 17, 2024.

Since this was a reimbursement for discrimination, many farmers assume that this may be non-taxable. To address these questions, the IRS just released three FAQs on the program. We will list each of them (since there are only three).