IRS: Farmers affected by MF Global bankruptcy can avoid tax penalty

WASHINGTON — The Internal Revenue Service will provide penalty relief to farmers who incur estimated tax penalties because they did not timely receive Forms 1099 from MF Global or its court-appointed trustee, and were unable to file their 2011 calendar year tax return by March 1, 2012.

The IRS also today provided the affected farmers with instructions on how to apply for this penalty relief.

Generally, farmers can avoid an estimated tax penalty if they file their returns and pay the full amount of tax shown on their return by March 1, 2012.

Background

MF Global filed for bankruptcy Oct. 31, 2011, after revealing that hundreds of millions of dollars in customer money was missing.

While the court-appointed trustees are working to untangle MF Global’s financial records, but many former customers of MF Global did not receive their Forms 1099 by March 1.

The delay in mailing the Forms 1099 may have affected the ability of many farmers to file their 2011 calendar year return by March 1, 2012.

To request a waiver of the estimated tax penalty, complete Form 2210-F, Underpayment of Estimated Tax by Farmers and Fisherman. As stated in the instructions to Form 2210-F, a short statement should be attached to the form stating that you received a late 1099 from MF Global.

At the top of your Form 2210-F, write “MF Global”.

The Form 2210-F and accompanying Form 1040 cannot be submitted electronically.

In the case of farmers who have filed their tax returns and an estimated tax penalty is assessed, contact the IRS, identify this relief and the penalty will be abated.

The IRS toll-free number for general tax questions is 800-829-1040. For information about the liquidation of MF Global, including the trustee’s statements on the issuance of Forms 1099, former customers may visit www.mfglobaltrustee.com.