Agribusiness BlogFarm CPA Today

New requirement when claiming salaries and wage deduction on entity tax returns

With recent IRS procedural changes, you might find your CPA or tax preparer asking for additional information when completing your 2016 entity federal and state tax returns. Specifically, the IRS is now requiring individuals preparing your corporation, S-corporation, or partnership tax return to report the number of W-2’s your entity completed and sent out to employees if you are claiming a deduction for salaries and wages expense.

This change is the culmination of recent efforts by the IRS to reduce the number of fraudulently filed tax returns that are becoming increasingly prevalent. As you meet with your CPA or tax preparer to discuss the preparation of your farm, or agriculture related entity’s tax return this year, please keep in mind that that you will be required to furnish this information. While this is additional step may seem cumbersome, we believe that it will serve to help limit the amount of fraudulently filed returns that are affecting farm businesses around the country.

Special thanks to Michael Lemon for writing this post.


  • Principal
  • CliftonLarsonAllen
  • Yakima, Washington
  • 509-823-2920

Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a partner with CliftonLarsonAllen in Yakima, Washington, as well as a regular speaker at national conferences and contributor at Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. In fact, Paul drives combine each summer for his cousins and that is what he considers a vacation. Leave a comment for Paul. If you would like to leave a comment for Paul, follow the link above, however, please make sure to include your email address so that he can reply to your comment (your email address will not automatically show up).


I think it is important to keep up with what is changing so you can be prepared. Great information, thanks so much for sharing!

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