The 2008 Farm Bill required the implementation of average Adjusted Gross Income (AGI) limitations for program eligibility for the 2009 through 2012 program years. The average AGI provisions are applicable to most of the programs administered by the Farm Service Agency (FSA) and the Natural Resources Conservation Service (NRCS). Generally, these limitations are: $500,000 average nonfarm AGI for commodity programs; $750,000 average farm AGI for direct payments under the DCP and ACRE programs; and $1 million average nonfarm AGI for conservation programs. 

All persons and legal entities requesting certain program payments, either directly or indirectly, are subject to the average AGI provisions. Persons or legal entities whose average AGI for the three taxable years preceding the most immediately preceding complete taxable year exceeds the qualifying limits are ineligible for the applicable payment. If the payments are issued to an entity, general partnership or a joint venture, payments are reduced in an amount that is commensurate with the direct and indirect interest of any member or interest holder who is noncompliant with the average AGI provisions. All direct and indirect recipients of commodity or conservation program payments are required to complete the form CCC-926, Average Adjusted Gross Income (AGI) Statement.

The 2008 Farm Bill also required the establishment of valid procedures to conduct audits of persons and legal entities in order to ensure compliance with the AGI provisions. USDA and IRS have developed an electronic information exchange process strictly for the purpose of average AGI verification. This process electronically looks at certain line items on tax returns filed for the applicable three-year period; performs a series of calculations to arrive at the average amounts; and then compares these values to the average AGI limitations. USDA will then receive the results of these comparisons with indicators of whether the participant appears to exceed or not exceed the average AGI amounts. No actual tax data will be included! It is important to remember that USDA will receive no actual tax data and FSA county office personnel will not view any tax return information. The cases that appear to exceed the average AGI limitations will be received and evaluated by FSA state office or headquarters personnel.

IRS requires written consent from the individual or legal entity to provide USDA verification of
the average AGI. Such written consent is given by completion of forms CCC-927, Consent to Disclosure of Tax Information – Individual; or if a legal entity, CCC-928, Consent to Disclosure of Tax Information – Legal Entity. These forms allow for the selection of the appropriate year or years and authorize IRS to perform the average AGI calculations. These consent forms must be completed for the same year or years an individual or legal entity was required to provide an AGI certification. These consent forms must be completed and mailed directly to IRS by the individual or legal entity. They will not be accepted or retained by FSA or NRCS in any USDA Service Center. Failure to submit these forms will likely result in the required refund of payments received from FSA and NRCS plus interest, and ineligibility for future payments.

These consent forms (CCC-927 and CCC-928) are available at the FSA Office. Anyone with questions concerning AGI or AGI compliance can contact the FSA Office at 358-2285 (Pendleton) or 799-4317 (Pocahontas).