Farmers with accounts with now bankruptcy broker MF Global who could not file their taxes properly have not been fined. When MF Global filed for bankruptcy late last year, many farmers did not receive their 1099’s as a result. This caused all sorts of complications. Many farmers could not file their taxes before the March 1 deadline and most had to rely on their own personal records to file their tax submissions, thus rendering their figures inaccurate. Many underpaid their taxes because of this.
But the IRS has decided to waive the fines for late payments and underpayments for farmers affected by the MF Global bankruptcy. MF Global was run by former New Jersey governor Jon Corzine and ran into financial problems when it placed heavy bets on the European sovereign debts. As a result, the company lost approximately $1.6 billion from their customers’ accounts, many of whom are from the agricultural sector, farmers included.
The earlier than normal March 1 deadline was set for the farmers in return for not paying estimated taxes throughout the year. Farmers who earned at least two-thirds of their gross income from farming and were to file an estimate of what they owe in mid-January. IRS spokesman Eric Smith said, “Because so many farmers take advantage of that special rule, it became an issue” when they did not receive the tax forms before March 1.
However, the farmers who were given the waiver said the IRS could have given them relief much sooner but the relief was better than nothing at all. There is no estimate of how many farmers are affected by the MF Global debacle.
The IRS says it is not uncommon for the agency to waive penalties in extreme circumstances and it has done so before, for example for people affected by natural disasters.