SECTION 1. PURPOSE

.01 This revenue procedure provides procedures applicable to a taxpayer in a farming business regarding the application of § 263A of the Internal Revenue Code (Code). Prior to the enactment of Public Law 115-97, 131 Stat. 2054 (Dec. 22, 2017), commonly referred to as the Tax Cuts and Jobs Act (TCJA), a taxpayer in a farming business could elect under § 263A(d)(3) to have § 263A not apply to certain plants produced by the taxpayer’s farming business. Section 13102 of the TCJA added new § 263A(i) to the Code, which provides that § 263A does not apply to a taxpayer, other than a tax shelter (as

defined in § 448(d)(3) of the Code), for a taxable year in which the taxpayer qualifies as a small business taxpayer by satisfying the gross receipts test in § 448(c) of the Code.

.02 Section 5 of this revenue procedure provides the exclusive procedures for a taxpayer that elected under § 263A(d)(3) to have § 263A not apply to certain plants produced by the taxpayer in a farming business if the taxpayer: (1) wants to revoke its election under § 263A(d)(3); (2) qualifies as a small business taxpayer within the meaning of § 263A(i); and (3) wants to apply the exemption from § 263A that is provided in § 263A(i) beginning with such revocation taxable year.

.03 Section 6 of this revenue procedure provides the exclusive procedures for a taxpayer in a farming business that uses the exemption from the application of § 263A provided under § 263A(i) if the taxpayer: (1) no longer qualifies as a small business taxpayer eligible to use the exemption under § 263A(i); and (2) wants to make an election under § 263A(d)(3) and the accompanying regulations for certain plants produced by the taxpayer in a farming business for the first taxable year in which the taxpayer is ineligible to use the exemption in § 263A(i).