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Restaurant Group Seeks Guidance on Charitable Contributions Costs

MAY 23, 2022

Restaurant Group Seeks Guidance on Charitable Contributions Costs

DATED MAY 23, 2022
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May 23, 2022

Courier's Desk
Internal Revenue Service
Attn: CC:PA:LPD:PR (Notice 2022‐2021)
Room 5203
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044

Re: Reinstatement of Section 170(e)(3) Guidance Project on the 2022-2023 Priority Guidance Plan

Ladies and Gentlemen:

As requested by Notice 2022‐21, 2022‐21 I.R.B. 1, Darden Restaurants, Inc. ("Darden") would like to express its support for reinstatement of the project with respect to "[g]uidance under [Internal Revenue Code] §170(e)(3) regarding charitable contributions of inventory" for the benefit of the ill, the needy or infants on the 2022‐2023 Priority Guidance Plan.

Darden owns and operates more than 1,800 restaurants and employs nearly 160,000 team members, making us one of the 50 largest employers in America. Headquartered in Orlando, Florida, Darden is a full‐service restaurant company featuring a portfolio of differentiated brands that include Olive Garden, LongHorn Steakhouse, Cheddar's Scratch Kitchen, Yard House, The Capital Grille, Seasons 52, Bahama Breeze and Eddie V's.

As a restaurant company, Darden has a unique opportunity to aid in the fight against hunger. Launched in 2003, the Darden Harvest program provides a mechanism for getting fresh and healthy food to people who need it. Each day, across Darden's more than 1,800 restaurants, the company "harvests" surplus, wholesome food that has not been served to guests and prepares it for donation to local nonprofit partners. Through a partnership with Food Donation Connection, which coordinates donations across the country, the food is then served at food banks, shelters and other charitable organizations. Since the program's inception, more than 127 million pounds of food — totaling more than 200 million meals — has been donated through Darden Harvest, including 5.7 million pounds of food in fiscal year 2021 alone.

Given the size of the Darden Harvest program and its importance to Darden's corporate mission, Darden is particularly interested in the treatment under Section 170(e)(3) of current year acquisition costs with respect to charitable contributions of inventory and other property, as such treatment allows the company to continue the Darden Harvest program to satisfy the demand food banks, shelters and other charitable organizations through its donations. In this regard, Darden supports the approach contained in prior public comments that would not only allow the company to recover its basis in contributed food as cost of goods sold, but also allow it to compute the enhanced deduction “bump” available under Section 170(e)(3).1 The company believes that the promulgation of guidance consistent with this approach would ensure that Section 170(e)(3) works as Congress intended and would allow companies like Darden to continue their food donation programs. Furthermore, Darden believes it is important that the promulgation of this guidance be given the highest priority through reinstatement on the 2022‐2023 Priority Guidance Plan, particularly in light of the project's inclusion in prior Priority Guidance Plans and bipartisan Congressional interest in the project.2

Darden appreciates the opportunity to submit this letter and would be happy to meet with the Treasury Department and/or the Internal Revenue Service to discuss it in greater detail.

Respectfully submitted,

Angela Simmons
Sr. Vice President, Corporate Tax
Darden Restaurants, Inc.
Orlando, FL

FOOTNOTES

1"Guidance Requested on Treatment of Charitable Contribution Costs," 2014 Tax Notes Today 88-20 (Apr. 30, 2014).

2“Firm Seeks Reinstatement of Charitable Contributions Project,” 2022 TNTF 93-22 (May 12, 2022).

END FOOTNOTES

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