SOME SALES OF AGRICULTURAL COMMODITIES ARE EXEMPT FROM BROKER REPORTING REQUIREMENTS.

Announcement 91-20

Section 6045(a) of the Internal Revenue Code provides, in part, that every person doing business as a broker shall, when required by regulation, file an information return showing the name and address of each customer, as well as details regarding gross proceeds and other information as may be required. The Service has received inquiries as to whether the reporting requirements under section 6045 apply to certain sales of agricultural products or commodities, or commodity certificates issued by the Commodity Credit Corporation.

The Service is currently studying whether these types of transactions should be reported under section 6045 of the Code and guidance will be forthcoming. In the interim, for 1990 and prior years, the Service has determined that the following transactions will not be subject to the reporting requirements of section 6045:

(1) spot or forward sales of agricultural products or commodities (but not sales of interests in agricultural products or commodities, such as sales of regulated futures contracts or forward contracts), effected by any person regardless of whether that person takes title to the agricultural products or commodities; and

(2) sales of negotiable commodity certificates issued by the Commodity Credit Corporation.

The Service invites comment on whether these transactions should be subject to the reporting requirements of section 6045 on a prospective basis.