S. Clark Jenkins and Mary P. Jenkins - Page 9

          the ultimate consumer of the deficient fertilizer can be                    
          identified, the penalty is paid to the consumer.                            
               If the ultimate consumer cannot be identified, the penalties           
          are paid to the State department of agriculture.  Often the                 
          ultimate consumer cannot be identified because most fertilizer              
          samples are taken from dealer storage, and the dealers do not               
          record who purchased a particular batch of stored fertilizer.               
          Thus, most penalties are paid to the State department of                    
               The departments of agriculture in North Carolina and                   
          Virginia test approximately 10 percent of the fertilizer sold by            
          each fertilizer manufacturer.  However, if a fertilizer                     
          manufacturer is consistently below standard, the department of              
          agriculture will test a greater percentage of that manufacturer's           
               Section 162(a) provides that taxpayers may deduct all                  
          ordinary and necessary trade or business expenses.  Subject to              
          section 162(f), respondent concedes that the payments at issue              
          meet the requirements of section 162(a) as deductible business              
          expenses.  The payments were normal, usual, and customary, and              
          they stem from an activity ordinarily to be expected from WSC and           
          other fertilizer manufacturers.  Commissioner v. Heininger, 320             
          U.S. 467, 471 (1943); Deputy v. Dupont, 308 U.S. 488, 495 (1940).           
          The payments were appropriate and helpful also for the                      

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011