Rev. Proc. 66-1

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to provide an administrative procedure whereby cash basis taxpayers may expeditiously obtain consent to change their accounting practice of reporting payments received under the United States Department of Agriculture 1963 Wheat Stabilization Program and the 1963 Feed Grain Program. Taxpayers complying with the provisions hereof will be deemed to have obtained the consent of the Commissioner of Internal Revenue to change their practice of reporting diversion payments received under such programs.

SEC. 2. BACKGROUND.

.01 Wheat and feed grain diversion payments received by a cash basis taxpayer are includible in gross income when they are received by him, or made available to him, whichever is earlier. See Rev. Rul. 65-97, C.B. 1965-1, 211, and Rev. Rul. 65-98, C.B. 1965-1, 213.

.02 Under existing procedure, a cash basis taxpayer who has established an accounting practice of reporting wheat and feed grain diversion payments in the year in which they are actually received wishing to minimize the effect of reporting in one year's income payments attributable to two crop years, is required to request application of the administrative procedure under Revenue Procedure 64-16, C.B. 1964-1 (Part 1), 677.

SEC. 3. APPLICATION.

This Revenue Procedure is applicable to any cash basis taxpayer who wishes to request relief from the doubling up of wheat and feed grain diversion payments from the year in which they are actually received to the practice of reporting such diversion payments in the year in which they are received, or made available, whichever is earlier. To obtain relief the taxpayer must comply with the requirements of section 4, below. Taxpayers satisfying these requirements will be deemed to be in compliance with the provisions of Revenue Procedure 64-16.

SEC. 4. REQUIREMENTS.

.01 For purposes of this Revenue Procedure the collateral agreement required by Revenue Procedure 64-16 will take the form of a simple signed statement along the following lines.

I am a cash basis taxpayer and I wish to change my practice of reporting wheat and feed grain diversion payments for Federal income tax purposes, beginning with the year 1965. I agree to include such payments in the year in which they are made available to me instead of the year in which they are actually received and further agree that I will report one-tenth of the amount of the payment received in 1965 which was attributable to 1964 until the total amount of that payment has been included in my taxable income.

.02 The statement required by this section must be attached to the taxpayer's 1965 Federal income tax return, or an amended return for the year 1965, in the event the taxpayer was not aware of this procedure at the time the 1965 return was filed.

SEC. 5. RECORDS.

The taxpayer must maintain adequate records with respect to the wheat and feed grain diversion payments so that the District Director may verify the data concerning the change.

SEC. 6. EFFECTIVE DATE.

This Revenue Procedure shall be effective for taxable years wherein diversion payments attributable to 1964 were deferred to 1965.

¹ Also released as Technical Information Release 789, dated December 21, 1965.