Tax Court Establishes Precedent: Confirms Agriculture Qualifies for R&D Tax Credits

Livestock and Row Crop Decisions Could Unlock Billions for Producers Nationwide

HOUSTON, Feb. 6, 2026 /PRNewswire/ -- Following a landmark ruling affirming the validity of Research and Development (R&D) credit claims for crop producers, the U.S. Tax Court has now confirmed that innovations in livestock production likewise qualify for the R&D credit. alliant applauds the decision which clarifies that the broader agriculture community and the tens of thousands of farmers, ranchers, growers, food science businesses, and producers claiming the credit are right to do so, and just as entitled to its benefits as businesses in manufacturing, technology, engineering, and other innovation-driven industries.

Generally speaking, agribusinesses can qualify for the credit through innovations and experimentations performed to increase crop yield or animal performance. In the February 3, 2026 ruling, the Tax Court held in George v. Commissioner that experimentation to improve poultry health, disease resistance, and growth rates constituted qualified research under Section 41 of the Internal Revenue Code—marking the first time animal agriculture had been legally questioned and recognized for R&D credits. The decision follows the Court's 2022 ruling in JG Boswell Co. v. Commissioner, which validated R&D credits for row crop farming operations.

"The Tax Court deserves tremendous credit for carefully analyzing the science and innovation happening every day on American farms, ranches, and food science businesses" said John Dies, lead counsel in the George case. "These rulings recognize that agriculture is an innovation-driven industry where producers constantly experiment to improve yields, animal health, disease resistance, and sustainability. The Court's decisions solidify the legislative intent of promoting innovation for livestock and crop producers nationwide."

While some practitioners had argued whether farmers and ranchers deserved the R&D credit, this ruling finally puts that debate to rest.

The George Case

George's of Missouri, Inc. (GOMI), one of the largest fully integrated poultry producers in the United States processing approximately 3.5 million birds weekly, has been innovating since 1922. After surviving the Great Depression by pivoting from a small grocery store to live chicken sales, the company evolved into a major operation supplying customers including Kentucky Fried Chicken.

Operating on razor-thin margins of approximately one cent per pound of chicken, GOMI relies heavily on data-driven experimentation with growth rates, mortality rates, and disease prevalence to stay competitive. The company partnered with alliantgroup in 2014 to document these ongoing research activities.

The Tax Court validated research initiatives including vaccine and antibiotic trials, probiotic research, genetic line experimentation, and disease prevention protocols. The Court explicitly rejected the IRS arguments that livestock trials constitute mere evaluation of available alternatives, and affirmed that the work done by GOMI fully conformed with each test for qualification of the R&D credit.

While the Court did disallow a portion of credits claimed, its reasoning focused on the depth of detail in documentation made available by the taxpayer on some projects. As there had been no prior guidance on documentation requirements for these specific operations, it is welcome clarity from the Court on where lines should be drawn on the topic.

Relying on Necessary Expertise

The IRS had also sought to levy "accuracy-related" penalties on George's. The Court found it unnecessary to entertain whether the IRS had proved its case in regards to the penalties because GOMI had acted in good faith by relying on the advice of alliantgroup saying, "Petitioners reasonably relied in good faith on the advice of alliantgroup. Accordingly, petitioners are not liable for the section 6662(a) accuracy-related penalties for tax years 2014 and 2016."

The Court cited alliantgroup's pedigree, expertise, and experience in making its determination. "alliantgroup had over 12 years of experience in performing tax credit and incentive studies. It had numerous employees with experience in the highest levels of tax law, including a former IRS commissioner, former tax counsel to the U.S. Senate Finance Committee, and former members of Congress. alliantgroup extensively trains its employees on the intricacies of the Code upon recruitment …alliantgroup assigned Associate Director Jeremy Troutman as the lead consultant on the research credit study. Mr. Troutman had been with alliantgroup for 16 years and completed approximately 300 research credit studies by the time of trial."

The Court also referenced alliantgroup's rigorous three-phase methodology involving multiple on-site visits, extensive employee interviews, and comprehensive documentation and data analysis, resulting in a final research credit study detailing the information gathered in extensive detail. This highlights the necessity of engaging with experienced providers, with validated processes, when claiming the credit.

Industry Impact

"These Tax Court decisions represent a watershed moment for American agriculture," said alliant Strategic Advisory Board Chairman of Agriculture and Former U.S. Secretary of Agriculture Mike Johanns. "Our farmers, ranchers, and producers are among the most innovative in the world. The Court has rightfully recognized that this innovation deserves the same federal support as research in other industries."

About alliant

alliant is a leading consulting and technology firm dedicated to helping businesses grow.

For over 25 years, alliant has served businesses as their growth partner, helping leaders navigate the people, process, and technology challenges that define modern business. Over the last 8 years the company acquired best in class practices in Consulting, AI, Managed Services and Technology all with the goal of keeping U.S. businesses competitive in this extremely challenging and chaotic market.

alliant is headquartered in Houston, Texas, with additional offices in Austin, Boston, Chicago, Indianapolis, New York, Irvine, Sacramento, Washington, D.C., Bristol, and London, U.K., and Hyderabad, India.

SOURCE alliantgroup