The taxpayer was a nonexempt ag co-op that bought, stored, marketed and sold grain. The grain was purchased from the co-op's members (farmers) and was sold to grain processors. The co-op, along with two other co-ops, formed an LLC. The LLC was the licensed grain dealer and was classified as a partnership for tax purposes, but was not a cooperative. After the LLC was formed, the taxpayer got out of the grain business and surrendered its grain licenses under a non-compete agreement with the LLC. The taxpayer's patrons could continue to sell to the LLC. The taxpayer wanted to treat the LLC's purchases of grain as its own, the LLC's payments as patronage allocations and that the purchases were deductible on the taxpayer's return as PURPIMs. The IRS determined that such treatment was not allowed because the purchases were by an entity that was not subject to cooperative taxation under Subchapter T. The IRS also determined that there was no facts that provided an argument that the LLC was acting as the taxpayer's agent. IRS noted that a payment to a co-op patron for grain cannot be treated as PURPIM unless it is paid by means of an agreement between a co-op and the patron. That didn't exist. F.S.A. 20150801F (Apr. 22, 2014).