October 5, 2000 | Read Time: 1 minute
By GRANT WILLIAMS
The I.R.S. has released “field service advice” to agents that says an unidentified chain of grocery stores should not value four-day-old unsold bread that it donates to food banks at full retail price when the company takes charitable-contribution deductions.
The grocery chain delivered freshly baked bread to its stores every day of the week except Sunday. On delivery days, the company removed any unsold bread that had been on the shelves for three days, and donated the four-day-old bread to food banks.
Because the grocery chain did not make bread deliveries on Sundays, it did not remove three-day-old bread from its shelves on Sunday mornings. That meant the company sold some four-day-old bread at full retail price on Sundays, which led the company to argue that the four-day-old bread it contributed on other days was worth full retail price.
The I.R.S. disagreed. One reason: The government said that four-day-old bread is typically sold from grocery stores´ discount racks or thrift-shop shelves — what the revenue service called the “relevant market” of comparison — at half price (Field Service Advice 1995-4).
