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vendors their own money, either reducing the balance of a
vendor’s promotional allowance account or delivering the proceeds
of a vendor’s check), its description of the facts does not
differ markedly from respondent’s:
The payments in question were simply price rebates; no
different than the price discounts and rebates afforded
Member Stores on a day-to-day basis throughout the
year. The day-to-day rebates and price discounts also
represented value passing from Petitioner, who granted
them, to the Member Stores, who purchased the goods to
which the rebates and discounts attached. * * *
If we should find that petitioner exercised sufficient
control over the petitioner-delivered currency to cause us to
conclude that petitioner had a receipt in an equal amount,
petitioner argues that either the receipt did not increase its
gross income because of an offsetting adjustment (either an
increase in petitioner’s cost of goods sold or a reduction in the
amount of its receipts from sales to member stores) or, if the
receipt did increase its gross income, it had an offsetting
deduction.
B. Discussion
1. Control
Petitioner organized the food shows and required vendors
wishing to participate to offer special deals (show money) on
their products offered and ordered at the show. In the case of
an off-invoice discount, petitioner accorded the member store the
discount and, in turn, was accorded an equal discount by the
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Last modified: November 10, 2007