Our Blog

Read the Latest News

Six years ago, I had to be convinced to get a smart phone so I could check email while away from the office. Now I rarely don't have the phone in pocket, whether I am in the office or on the farm. Toddlers  get frustrated when the encounter TVs that don't respond to touch like IPADS. The world is changing. As I hear from time to time, "I saw on the internet that if it is on the internet it must be true."

Ag is no exception. Online and televised auctions for livestock are becoming all the rage. Unfortunately, just because it looks like an auction, doesn't always mean it is conducted like the auction at the sale barn. Basically, an auction is a series of offers (will you buy at this price) followed by a rejection (any other bidders) followed by a counter offer (okay your price is agreeable to me). Auctions are covered by federal regulation if they take a commission of the sale, those who are regulated can be found at  www.gipsa.usda.gov . Auctions that take a flat fee per animal may not be covered or regulated by the federal rules at all. Which makes it hard to deal with.  As always, it is good to do a little back ground work  and check the owners of the web site and auction company.

To report a problem you've encountered buying livestock, or to file a complaint, call 1-800-998-3447.

It is not too early to consider sending notice to terminate the land owner tenant relationship, but it will be if it is not taken care of by 1 Sept.

When terminating a lease, Iowa Code requires adherence to proper notice, and failure to follow Iowa laws regarding notice to a farm tenant may result in a renewal of the lease under the current terms:

  • If you lease ground you have to provide notice of termination to the tenant by September 1, or the lease automatically renews for the following year;
  • Farm tenants who are leasing crop parcels of less than 40 acres the rules have changed and they also have the right to notice by 1 September. This is a change from the prior law.

Tenants with crops still in the ground may not be able to harvest until after March 1. Each respective party (and their legal counsel) most likely has different beliefs about what the result should be there:

  • Landowners believe tenants must abandon the crop left (which the landowner most likely plans to harvest and keep); 
  • Tenants believe they have as much time as they like (perhaps even after spring planting on the acres that the tenant DID renew on).

Neither side is entirely correct. This issue has been before the Iowa Supreme Court already, in a case where weather prevented the tenant from making a timely harvest. He did not renew the lease. That spring, the landowner refused access to the tenant's harvest attempts and instead, turned cattle and hogs out on the ground to consume the crop.

The Iowa Supreme Court declared that a matured crop belongs to the tenant, subject to the landowner's lien (if filed correctly). Maturity doesn't matter if the crop is severed from the ground, but the question turns on whether or not the crop still draws sustenance from the soil. However, abandoned crops are not treated the same. Abandoned crops become the property of the landowner and can be disposed of however they like.

No clear guidance from the court is available to distinguish matured, non-severed crops from abandoned crops. However, common sense can help. A couple of stalks of corn in the corner of the field left, or maybe even a partial row left to help with snow drifting, can likely be declared abandoned by the tenant and taken by the landowner.  Some would call that a "blonde corn maze". Conversely, 20 acres left in the field is still property of the tenant, who has a reasonable right to harvest in peace. 

Those who are just beginning the farm operation or those who are slowly withdrawing from it would do well to familiarize themselves with the Internal Revenue Code § 183 "Activities Not Engaged in for Profit", occasionally referred  The "Horse Shelter" or Hobby Loss Rules.

This code section is designed to prevent tax payers from claiming business losses (and thereby reducing income available for taxation) on activities that the tax payer primarily engages in for recreation, entertainment and personal enjoyment rather than a legitimate business purpose. Specifically, horse farms and cattle operations of small sizes are eyed with greater scrutiny.

The IRS has historically found this a difficult area to litigate in, but has developed training manuals and policies to help examiners who may have no knowledge of farm operations, in order to ensure compliance with the Internal Revenue Code.  A review of the training manual shows the IRS attempts to familiarize its agents with the world of competitive show animals, but also the distinction between registered herds of cattle and commercial herds of cattle. The manual advises examiners to consider calculating the volume of feed purchased versus animals sold to ensure no under reporting of income, such as cash sales.

Animals are at the core of many, many farm operations, but even the grain farmer is likely to have a few animals or a farm dog around, and most anyone who farms is bound to encounter wild animals that impact the operation.  The rules that affect animals cover a swath of farm life as varied as the animals themselves and the activities that involve them.

A dog owner is liable for the action of his dog. Don't post "Beware of Dog" signs; believe it or not, if your dog was to injure someone, such signs might be used against you in court, as an admission that you knew you were dealing with a problem animal.  Your best advice is to control your animals.  You may kill a dog that is attacking or attempting to bite a human being. 
Every dog must have a rabies vaccination.  Any dog, cat or other animal which has bitten or attacked a person must be reported.  If rabies is suspected, animal-control officials can order the owner to confine the animal or it can be impounded by animal-control officials, who can hold the dog for ten (10) days and may then humanely destroy it.  If the dog is returned to its owner, the owner must pay fees for impoundment.

Note:  If you confine a non-livestock animal for suspected rabies (or any other reason), be aware that the Iowa Code makes it unlawful to "to fail to supply the animal during confinement with a sufficient quantity of food or water, or to fail to provide a confined animal with adequate shelter, or to torture, deprive of necessary sustenance, mutilate, beat, or kill such animal by any means which causes unjustified pain, distress or suffering."

Friday, November 15, 2019
  • Patrick B. Dillon
  • Jill Dillon
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill Dillon focuses on family law, estate planning and IRS matters. Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill spent extensive time advocating for low income tax payers in front of the IRS and the State of Iowa Department of Revenue while at Drake.

File Your Federal and State Taxes Online

Share Some Ideas

Do You Have a Tip or an Idea for a Story? Tell Us About It.
Contact Us!