Terry53029

I like your answer better because obviously the client would prefer not to pay SE tax on the Seafood TRP..  I did review the instructions for the 1099-G but didn't see anything that addresses this type of relief payment.

The question I have is why wouldn't the U S Dept of Agriculture have entered the amount in block 6 of the Form 1099-G for taxable grants, rather than block 7 which is for agriculture payments?

Would you agree agriculture payments reported on Form 1099-G to a farmer who is actively involved in farming would be subject to SE tax?   Is there any precedent there?

Don't you think the IRS computer would see a non-match with grants reported on 1099-G to them vs what appears on the tax return?

I can see why it could go either way, hence my dilemma.

If you have support for your recommendation it would be greatly appreciated.