USDA is working quickly to resolve issues with 2012 IRS 1099 forms issued to farmers who received financial assistance from the Natural Resources Conservation Service (NRCS). According to USDA’s Office of the Chief Financial Officer, the IRS forms issued in January may either be in the wrong amount, or may not have been issued. Farmers who have questions should email email@example.com, call 1-800-421-0323, fax 888-762-9037, or visit http://cod.nfc.usda.gov/contact_info/assistance.html.
Important data to produce correct 1099 information was left out when a system change took place May 1, 2012, and NRCS financial experts are working with the USDA’s Controller Operations Division to help get 1099s to the appropriate people as quickly as possible.
Program participants please be advised:
· Incorrect (or no) 1099 tax forms were sent to the majority of NRCS’ 64,000+ program participants for calendar year (CY) 2012.
· Producers and the IRS will receive corrected 1099s from USDA’s Controller Operations Division (COD) as soon as possible; it is anticipated they will be sent by the end of this week (March 29).
· Grantees of other agencies (i.e. Forest Service and Farm Service Agency) were also affected but NRCS had the largest number of affected program participants.
· The error occurred due to:
o The transition from the old FFIS (Federal Financial Information) System to the new FMMI (Financial Management Modernization Initiative) system.
o Bugs in the data extraction program that pulled data from the new FMMI system resulted in incomplete data.
o Instead of adding/recording subsequent payments, the program overrode all previous payments resulting in data sets reflecting only the last payment made instead of the sum of all payments.
· New 1099s were sent to program participants by USDA COD in late-February/early-March; those 1099s were also incorrect.
· USDA COD re-engineered the process and is confident the data is now correct.
· A third batch of corrected 1099s was created on March 24; they will be reviewed during the week of March 25; and will be sent to program participants and the IRS by the end of the week (March 29).
· Originally, USDA planned to send letters to notify participants of the situation.
o Instead, all efforts were focused on correcting the 1099s and distributing them as soon as possible.
o USDA COD still hopes to send letters once the distribution of 1099s is complete.
· For CY2013, the entire 1099 process will be revamped to ensure this does not happen again.
· In the interim, producers can:
o Wait for the corrected 1099s (to be sent by March 29), or
o File tax returns based on the records in their files, or contact USDA COD to learn the correct amount via:
§ email firstname.lastname@example.org, phone 1-800-421-0323, fax 888-762-9037, or web http://cod.nfc.usda.gov/contact_info/assistance.html.
· We apologize for the inconvenience this has caused, and thank those affected in advance for their patience as we correct the forms and data.