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Restaurant Group Hungry for Help on Charitable Contributions Costs

MAY 1, 2021

Restaurant Group Hungry for Help on Charitable Contributions Costs

DATED MAY 1, 2021
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May 1, 2021

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

Re: Inclusion of Section 170(e)(3) Guidance Project on the 2021-2022 Priority Guidance Plan

Ladies and Gentlemen:

As requested by Notice 2021-28, 2021-18 I.R.B. 1, Darden Restaurants, Inc. ("Darden") would like to express its support for continued consideration of the current 2020-2021 Priority Guidance Plan burden reduction 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.1 Specifically, Darden respectfully requests that guidance be issued consistent with prior public comments on the issue2 and that, until such time as such guidance is issued, the project be included on the 2021-2022 Priority Guidance Plan and any future priority guidance plans as necessary.

Darden owns and operates more than 1,800 restaurants and served more than 355 million meals in fiscal year 2020. 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 the 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 120 million pounds of food — totaling more than 100 million meals — has been donated through Darden Harvest, including 6.3 million pounds of food (the equivalent of more than 5 million meals) in fiscal year 2020 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). 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.

Darden appreciate 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
Senior Vice President, Corporate Tax
Darden Restaurants, Inc.

FOOTNOTES

1Department of the Treasury, 2020-2021 Priority Guidance Plan, at 8 (Nov. 17, 2020).

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

END FOOTNOTES

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