MF Global Causing Farmers Tax Problems
Lack of details in tax forms is making it difficult for farmers to prepare taxes.
Compiled by staff
Published: Feb 21, 2012
Clients of MF Global have had a lot of frustration and financial uncertainty since the company collapsed and filed for bankruptcy on Oct. 31, 2011. Many are still waiting to be reimbursed for the money that was frozen in MF Global accounts when bankruptcy was declared. Now the situation is weighing on tax preparation.
Tax forms are lacking detailed information on profits and losses, which is making it difficult to fill out tax returns for the Internal Revenue Service. And the deadline for most agricultural producers is approaching very quickly. Farmers who earned at least two-thirds of their income from farming and didn't estimate what they owed in mid-January, must file self-employed returns to the IRS by March 1.
Tax form 1099s are usually sent out by Jan. 31, but the trustee overseeing the MF Global bankruptcy, James Giddens, applied for a 30 day extension to send out some of the 1099s. Even those forms that have been received from accounts that were rolled into other brokerages are lacking data. Many only have data since they were transferred in November without any details of profits or losses during the first 10 months of 2011. Many farmers are having to hire tax specialists or attorneys to sort out how to report their taxes and figure out what they owe, which is yet another expense and hassle for producers.
According to Kent Meister, an agent with non-profit Pioneer FBFM Association in central Illinois, they have been receiving a large number of inquiries from clients about the delayed 1099s.
The Commodity Customer Coalition has asked Secretary of the Treasury Tim Geithner to direct the IRS to provide some guidance for MF Global customers on how to proceed concerning funds still frozen in the bankruptcy. Although nearly three-fourths of the money has been returned to customers, tax experts say that because there is the possibility the remainder may be returned, customers are unable to declare it as a loss.
An IRS spokesman declined to comment on the delays, saying the agency could not discuss "a specific taxpayer or situation." The agency's website directs taxpayers to submit an amended return if they receive a 1099 form after filing their taxes.
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