7 CFR 14.5 - Procedure.
(a) The portion of an applicable payment that may be excluded from gross income under part 14 shall be that portion or all, as appropriate, that -
(1) Is determined to be made primarily for the purpose of conserving soil and water resources, protecting or restoring the environment, improving forests, or providing wildlife habitat; and
(2) Is determined by the Secretary of the Treasury as not increasing substantially the annual income derived from the property associated with the payment.
(b) Primary purpose means the principal, fundamental, predominant, or independent objective for which a payment is made. The following shall be considered in determining the primary purpose of a payment:
(1) Single-purpose payments shall be considered as having that purpose as their primary purpose.
(2) Multiple-purpose payments. If a payment is made for several purposes, it may be considered as having soil and water conservation, environmental protection or restoration, forestry improvement, or providing wildlife habitat as its primary purpose to the extent of the portion of the payment that is made for one or more of such purposes.
(3) Where a purpose of a payment, or portion thereof, is in doubt, the following sources should be considered -
(i) Authorizing legislation, legislative history, administrative regulation, administrative history, interpretive case law, and the administrative policies and procedures under which the applicable program operates and the payment is made; and
(ii) Agreements or other documentation accompanying the transfer of the payment;
(iii) Use made of the payment by the recipient.