Co. Says IRS Owes $3.5M In Manufacturing Tax Deductions

Law360 (July 20, 2020, 7:02 PM EDT) -- A Wisconsin-based e-commerce business is owed a refund of nearly $3.5 million in domestic manufacturing deductions that the Internal Revenue Service improperly disallowed, the company told a federal court. 

Direct Supply Inc. is entitled to deductions under former Internal Revenue Code Section 199 for proprietary software the company developed that assists buyers and sellers of products for older-adult facilities and helps manage such facilities, the company said in a complaint, filed Friday in Wisconsin. The deductions total $3.46 million and involve tax years 2011 through 2015, according to the complaint. 

The company developed two discrete platforms — its e-procurement system, known as DSSI,...

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