The Eighth Circuit yesterday joined the Tax Court (131 T.C. 29 (2008)) in holding that § 162(k) precludes a company from deducting $9.4 million in cash distribution dividends paid on the redemption of stock held in an ESOP. Nestle Purina Petcare Co. v. Commissioner, No. 09-1381 (8th Cir. Feb. 9, 2010). The Eighth Circuit followed its prior decision in General Mills, Inc. v. United States, 554 F.3d 727 (8th Cir. 2009), as well as the Third Circuit's decision in Conopco, Inc. v United States, 572 F.3d 162 (3d Cir. 2009); the court rejected the Ninth Circuit's contrary result in Boise Cascade v. United States, 329 F.3d 751 (9th Cir. 2003)).
