Judges Question IRS Case Against Tomato Suppliers’ Accounting

The IRS may have good arguments to require a tomato harvesting company to change its accounting method, but Ninth Circuit judges weren’t convinced such a change is necessary.

In Tuesday oral arguments, judges with the US Court of Appeals for the Ninth Circuit peppered the IRS with questions about why it initiated an audit against California-based Morning Star Packing Co. and Liberty Packing Co. as well as the agency’s finding the two had over-reported accrued production costs. There has been no under-payment of taxes or penalties involved, so the IRS is ultimately made whole either way, Judge Michelle T. Friedland ...