Which Came First: The Chicken or the Research Credit Study?
We provide guidance on a Tax Court case that may help farmers obtain a R&D tax credit, but it was not a "win" for the taxpayer.
If you’ve ever wondered whether the IRS cares more about what you did or how you documented it, the U.S. Tax Court just handed down a massive lesson in poultry science and tax law. In George v. Commissioner, filed on February 3, 2026, Judge Greaves stepped into a “tangled nest” of research and development (R&D) credits that every farmer should study who wants to take advantage of the R&D tax credit. We have posted on the R&D tax credit previously.
Here’s the breakdown of why this case is more than just a bunch of “poultry” sums.
The Backyard Story: Data-Driven Chickens
The case involves George’s of Missouri, Inc. (GOMI), a vertically integrated poultry producer. In the world of high-volume, low-margin chicken farming, uniformity is everything. GOMI wasn’t just raising birds; they were running sophisticated trials on:
Feed additives (probiotics, enzymes, etc.)
Vaccines to combat specific diseases.
Genetics to find the healthiest, most uniform broilers.
The Catch: GOMI didn’t claim R&D credits on their original tax returns. Instead, they hired a consulting firm years later to conduct a retrospective credit study. They then amended their returns to claim millions in Qualified Research Expenses (QREs) consisting mostly of the cost of the feed used during these trials.
The IRS’s Beef (or Poultry?)
The IRS disallowed the credits, basically arguing that GOMI was trying to turn “routine data collection” into “qualified research” after the fact. They argued that because the trials were integrated into standard production (no pure “control groups”), they didn’t meet the “process of experimentation” test.
The Meat of the Ruling
The Tax Court’s analysis centered on the Four-Part Test for Section 41 credits and the “Pilot Model” concept under Section 174. Here is how the court ruffled the IRS’s feathers:
