Tyson Foods Incorporated and Subsidairies v. Commissioner T.C. Memo (2007-188)


T.C. Memo 2007-188

This is a case filed in the United States Tax Court.  The sole issue in this case is whether Tyson Foods Inc.  may depreciate approximately $2 million in expenditures for which complete and correct records were not maintained.

Basic Facts

Tyson Foods is a fully integrated producer, processor and marketer of poultry based foods with offices located in Springdale, Arkansas and Delaware.  In 1994, Tyson Foods purchased the stock of Culinary, a manufacturer of frozen food products, in a transaction that was treated as an asset purchase for federal income tax purposes. Tyson Foods did not credit a receivable for accounting for payments the City of Chicago made in connection with the subsidy. The Commissioner of Internal Revenue thinks that Tyson Food’s income should be reduced by $1,800,354 of the $5 million subsidy.

The IRS’ main criticism of the plaintiffs evidence is for the entire calender year of 1995 and cannot be allocated to the fsical years before the Court. Taxpayers are required to keep accounts or records, including inventories in order to establish gross income, credits, deductions and any other information that must be shown.  In order for an estimate to made by the Court, there must be sufficient evidence in the record and Tyson Foods failed to provide this.  The only evidence the plaintiffs had were recorded in the moving expenses account and no invoices were ever recorded or produced.


Tyson Foods has failed to satisfy its burden of proof in order to feel entitled to the deductions.

Click Here to view the full case: TG Missouri Corporation v. Commissioner, 133 T.C. 278 ( T.C. 2009).

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