IRS EXTENDS EXEMPTION FROM BROKER REPORTING REQUIREMENTS FOR CERTAIN AGRICULTURAL SALES.

Announcement 91-177

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.

Announcement 91-20, 1991-7 I.R.B. 31, states that the Service is currently studying whether these types of transactions should be reported under section 6045 of the Code and that guidance will be forthcoming. In the interim, Announcement 91-20 provides that 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.

Announcement 91-20 is hereby modified to apply to transactions occurring in 1991 and prior years and, as modified, is superseded by this announcement. The Service intends to issue proposed regulations in the near future regarding the reporting of these transactions and invites comment on whether these transactions should be subject to the reporting requirements of section 6045 of the Code on a prospective basis.

The principal author of this announcement is John Moriarty of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this announcement, contact John Moriarty on (202) 377-9589 (not a toll-free call).