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FERC/FPSC method to prepare its returns because it believed that
any expenditure that was classified as a repair under the
FERC/FPSC method would meet the deductibility standards of
section 1.162-4, Income Tax Regs. Petitioner filed its returns
(and prepared its financial statements) using the FERC/FPSC
regulatory accounting method rather than attempting to reexamine
the facts and circumstances of each expenditure to determine
whether each individual expenditure met the deductibility
standards of section 1.162-4, Income Tax Regs. The results of
respondent’s examination indicate that petitioner’s use of the
FERC/FPSC method of accounting produced results that were
generally consistent with the legal standards set forth in
section 1.162-4, Income Tax Regs.
Petitioner cites cases holding that where the Commissioner
has approved a taxpayer’s method of accounting during prior
examinations, the Commissioner may not change that taxpayer’s
method of accounting without determining that that method failed
to properly reflect income. See Geometric Stamping Co. v.
Commissioner, 26 T.C. 301 (1956); Klein Chocolate Co. v.
Commissioner, 36 T.C. 142 (1961). Since we have found that
respondent has never approved the “method of accounting” that
petitioner seeks, those case have no application here. Likewise,
Mamula v. Commissioner, 346 F.2d 1016 (9th Cir. 1965), revg. and
remanding 41 T.C. 572 (1964), is inapplicable since it involved
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