In response to $50 million in payments to ineligible farmers last year, the U.S. Department of Agriculture (USDA) and Internal Revenue Service (IRS) announced efforts to crack down on fraud.
A report from the governments investigative branch discovered that out of the 1.8 million individuals receiving farm payments over a three year period from 2003 through 2006, more than 2,500 were ineligible for payments because their income was too high, ISDA reported.
Secretary of agriculture Tom Vilsack said the goal of the anti-fraud program is to identify high-income farms, individuals and entities before farm program payments are actually disbursed to them.
Reforms initiated by the 2008 farm bill require the USDA to ensure payments go only to those who need them and are approved to receive them. The goal is to limit excessive payments while providing for fairness to family farmers, said Treasury secretary Timothy Geithner.
In order to be eligible for USDA payments starting with the current year, recipients will be required to sign a separate form which grants IRS the authority to provide income information to USDA for verification purposes.
Producers will be required to submit an IRS form 8821, or a similar form, authorizing the release of information to USDA. Without authorizing this release of information, producers are ineligible for program benefits.