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Senate TUESDAY, JANUARY 28, 1997

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E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 105 CONGRESS, FIRST SESSION Vol. 143 WASHINGTON, TUESDAY, JANUARY 28, 1997 No. 8 House of Representatives The House was not in session today. Its next meeting will be held on Tuesday, February 4, 1997, at 12:30 p.m. Senate TUESDAY, JANUARY 28, 1997 The Senate met at 10 a.m., and was ness until 12:30, with Senators to speak nations this week. The majority leader called to order by the President pro for up to 5 minutes each, with the fol- thanks all Members in advance for tempore [Mr. THURMOND]. lowing exceptions: Senator LOTT or his their cooperation. designee 30 minutes; Senator DASCHLE Mr. President, as we go into morning PRAYER or his designee, 60 minutes. I ask unan- business, I yield to the Senator from The Chaplain, Dr. Lloyd John imous consent that the time previously Iowa, Senator GRASSLEY. Ogilvie, offered the following prayer: allocated to Senator COLLINS be viti- f ated and that Senator BOND have 20 Dear Father, we need You more than MORNING BUSINESS anything You can give us. In Your minutes under his control during the presence we feel Your grace. We are as- morning business period. The PRESIDENT pro tempore. Under sured that we are loved and forgiven. The PRESIDENT pro tempore. With- the previous order, there will now be a You replenish our diminished strength out objection, it is so ordered. period for the transaction of morning Mr. BURNS. At 12:30 the Senate will with a fresh flow of energy and resil- business for not to exceed beyond the recess until 2:15 for the weekly policy iency. The tightly wound springs of hour of 12:30 p.m. with Senators per- conferences to meet. When the Senate tension within us are released and un- mitted to speak therein for not to ex- reconvenes after the conferences, the wind until there is a profound peace in- ceed 5 minutes each. majority leader would expect an addi- Mr. GRASSLEY addressed the Chair. side. We relinquish our worries to You tional period for morning business to The PRESIDENT pro tempore. The and our anxiety drains away. We take accommodate a number of Senators able Senator from Iowa. courage because You have taken hold who would like to speak this afternoon. Mr. GRASSLEY. Thank you, Mr. of us. Now we know that courage is As for the schedule for the remainder President. The Senator from Montana fear that has said its prayers. We of the week, the majority leader under- is on the floor and he had an interest in spread out before You the challenges of stands that the Banking Committee what I am going to speak about. the day ahead and see them in the will be taking action today on the f proper perspective of Your power. We nomination of Andrew Cuomo to be dedicate ourselves to do things Your Secretary of Housing and Urban Devel- FARMERS AND THE ALTERNATIVE way under Your sway. And now, Your opment. It is his hope that the full MINIMUM TAX joy that is so much more than happi- Senate will consider this nomination Mr. GRASSLEY. Mr. President, we ness fills us. We press on to the work of either today or tomorrow. The major- have had a victory—at least a tem- the day with enthusiasm. It’s great to ity leader will notify all colleagues ac- porary victory, but a good victory— be alive. In the name of our Lord and cordingly when that becomes sched- with the IRS. Fifty-seven of us intro- Savior. Amen. uled. duced a bipartisan bill, Senator DOR- f It is also the majority leader’s hope GAN leading for the Democrats, myself that this week the Senate will consider for Republicans. The bill was intro- RECOGNITION OF THE ACTING the nomination of William Daley to be duced to do for farmers what has been MAJORITY LEADER Secretary of Commerce. It is believed the law since 1981, that if deferred sales The PRESIDENT pro tempore. The the Commerce Committee will finish contracts were used, farmers were still acting majority leader is recognized. their work on that nomination tomor- taxed on the year that the money was f row, Wednesday. Therefore the Senate received. may act on Mr. Daley on Wednesday or The IRS made a ruling that for alter- SCHEDULE Thursday of this week. native minimum tax purposes that in- Mr. BURNS. Mr. President, today Once again, Senators should expect come would be taxed the year that the there will be a period for morning busi- rollcall votes on these important nomi- sale was made, not the year that the ∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. S693 . VerDate Mar 15 2010 22:29 Oct 24, 2013 Jkt 081600 PO 00000 Frm 00001 Fmt 0637 Sfmt 0634 E:\1997SENATE\S28JA7.REC S28JA7 mmaher on DSK5TPTVN1PROD with SOCIALSECURITY S694 CONGRESSIONAL RECORD — SENATE January 28, 1997 money was received. Well, obviously come from such sales for AMT purposes in reporting, must include in AMTI in the year this, if it were to go forward, would the taxable year they received their pay- of the sale both the cash received and the create a tremendous hardship in the ments—not the year of sale. fair market value (or the issue price) of the Earlier today, the IRS issued a Notice, a agricultural community because farm- deferred payment obligation. Otherwise, the copy of which is enclosed, advising those who farmer is using an impermissible method of ers would be taxed on two crops in 1 have not followed the Service’s position how accounting. If the farmer elects not to apply year, rather than the planning that they should report deferred contract com- the installment method to the sale, and re- normally goes on in cash accounting modity sales for AMT purposes on their re- ports the income in the year of the sale, farming. turns for 1996. Basically, for 1996 tax returns, there is no AMTI adjustment with respect to Common sense and reasonableness taxpayers should make no changes in how the sale. they have been reporting sales—even if con- have prevailed at the IRS. Last night Section 446(e) generally provides that a at about 6:30 I received a telephone call trary to the Service’s position. The Notice also provides guidance about taxpayer that changes its method of ac- from the IRS stating their decision to how to change the method of reporting de- counting must secure the Commissioner’s delay for 1 year the enactment of their ferred contract commodity sales for AMT consent before computing income using the latest rule so that farmers now will be purposes. Taxpayers who follow that guid- new method. In general, taxpayers who wish able to do during the current tax filing ance will receive audit protection with re- to change their method of accounting must system what they have been doing for gard to the AMT issue for all open years un- file Form 3115, Application for Change in Ac- the last 15 years, to just keep on ac- less they are currently under audit for this counting Method, with the Commissioner within the first 180 days of the taxable year counting for their income for tax pur- issue. The way deferred contract commodity in which the taxpayer desires to make the poses the way that it has legally been sales are reported for the AMT is a ‘‘method change, and must pay a user fee (ranging done. of accounting’’ for tax purposes. The law pro- from $500 to $900). Treas. Reg. § 1.446– Then just within the last hour Com- vides that the method of accounting a tax- 1(e)(3)(i). In addition, § 1.446–1(e)(3)(ii) author- missioner Richardson had delivered to payer uses for tax purposes, even if it is not izes the Commissioner to prescribe adminis- me her letter in response to my letter the correct method, cannot be changed with- trative procedures setting forth the limita- of December and also the latest rec- out the prior consent of the Commissioner. tions, terms and conditions necessary to ob- ommendations as far as the regulations The Service will issue automatic consent tain consent to change a method of account- are concerned implementing her deci- procedures for taxpayers to follow to change ing. from the accounting method they currently sion. Automatic change in method of account- use. This change must be made on a tax- ing: The Service will issue guidance that will The fact of life is, Mr. President, that payer’s federal income tax return for the 1997 allow farmers currently using an impermis- the Internal Revenue Service was tax year. Thus, taxpayers do not need to sible method of accounting for income from aware of 57 Members of this Senate in change how they report deferred contract the sale of farm products under deferred pay- commodity sales until filing their 1997 re- a bipartisan spirit—and maybe her de- ment sales contracts for AMT purposes to cision was because she is an appoint- turns. I hope this information is helpful to you. automatically change to a permissible meth- ment of the President and that it then od of accounting. Under the forthcoming reflects the new attitude at the White Please let me know if you have any ques- tions. guidance, farmers will be allowed to request House of bipartisanship during this Sincerely, the method change by attaching Form 3115 to their timely filed 1997 federal income tax congressional session.
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