Affiliated Foods, Inc. - Page 18

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          Petitioner bears the burden of proof on this issue.  Rule 142(a);           
          Welch v. Helvering, 290 U.S. 111 (1933).                                    
               Petitioner's contention that it held the promotional account           
          funds as a nontaxable intermediary rests upon a number of                   
          decisions of this and other courts.  See, e.g., Ford Dealers                
          Advertising Fund, Inc. v. Commissioner, 55 T.C. 761 (1971), affd.           
          per curiam 456 F.2d 255 (5th Cir. 1972); Angelus Funeral Home v.            
          Commissioner, 47 T.C. 391 (1967), affd. 407 F.2d 210 (9th Cir.              
          1969); Seven-Up Co. v. Commissioner, 14 T.C. 965 (1950).                    
               In Seven-Up Co. v. Commissioner, supra, Seven-Up Co. (7-Up)            
          manufactured and sold extract for a soft drink to various                   
          franchised bottlers.  Each bottler was granted an exclusive sales           
          territory by 7-Up and controlled its own sales promotion and                
          local advertising within that territory with the aid of 7-Up.               
          Certain bottlers decided that it would be more efficient to                 
          conduct promotion and advertising of the beverage on a national             
          level.  In order to fund the national advertising campaign,                 
          participating bottlers were required to pay 7-Up $17.50 per                 
          gallon of extract purchased.  The funds were administered by 7-Up           
          and were to be spent solely for advertising purposes.  The funds            

          respectively, these amounts are not part of the promotional                 
          account yearend balances.                                                   

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