- 3 -
Respondent increased petitioner’s gross income for each of
the audit years on account of those payments and denied
petitioner any offsetting deductions on the ground that the
payments are nondeductible patronage dividends. In part,
respondent defends against petitioner’s assignments of error by
claiming that petitioner is precluded from challenging
respondent’s adjustments on the basis of the outcome in
Affiliated Foods, Inc. v. Commissioner, T.C. Memo. 1996-505,
affd. in part, revd. in part and remanded 154 F.3d 527 (5th Cir.
1998); on remand T.C. Memo. 1999-136. Petitioner denies that it
is precluded from challenging the adjustments and claims that it
did not receive the payments, but, if it did, the payments either
did not increase its gross income because of offsetting
adjustments or, if they did increase its gross income, it was
entitled to offsetting deductions.
Unless otherwise indicated, all section references are to
the Internal Revenue Code as in effect for the audit years. The
references to subchapter T are to that subchapter (sections 1381
through 1388) of chapter 1 of subtitle A of the Internal Revenue
Code. Subchapter T deals with cooperatives and their patrons.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: November 10, 2007