Midland Empire Packing Co. v. Commissioner

Midland Empire Packing Co. (Midland) (plaintiff) used its basement to cure and store meat for 25 years without issue from occasional water seepage, but oil began seeping in from a nearby refinery, creating a fire hazard and odor that led federal meat inspectors to demand Midland either oil-proof the basement or shut down. Midland added concrete lining to the walls and floor to solve the problem and deducted the cost as an ordinary business expense; the Commissioner (defendant) challenged the deduction.