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But under the Sutherland Lumber-Southwest rule, the company can deduct its actual cost for providing such items to other employees. IRC section 267(a)(2) prevents related taxpayers that use different accounting methods from taking a current deduction on one hand but deferring income recognition on the other. Related taxpayers include corporate controlled groups with a 50% stock ownership requirement. Accounting bodies often encounter situations where strict compliance with the matching principle may not accurately reflect the […]

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