Certain Retail Activities are Not DPAD Eligible

The Large Business and International Division of IRS has issued a directive to examiners that lists several retail activities that typically don't constitute MPGE and, thus, the DPGR from the activities do not qualify to be deducted under I.R.C. Sec. 199.  The examples that the IRS lists include: (1) cutting blank keys to a customer's specification; (2) mixing base paint and a paint coloring agent; (3) applying garnishments to cake that is not baked where sold; (4) applying gas to agricultural products to slow or expedite fruit ripening; (5) storing agricultural products in a controlled environment to extend shelf life; and (6) maintaining plants and seedlings.  LB&I-04-0315-001, impacting IRM 4.51.2 (Mar. 16, 2015).     

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