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no support in general principles of tax accounting. On the
contrary, the general rule for the timing of income accruals as
stated in the regulations is that "Where an amount of income is
properly accrued on the basis of a reasonable estimate and the
exact amount is subsequently determined, the difference, if any,
shall be taken into account for the taxable year in which such
determination is made." Sec. 1.451-1(a), Income Tax Regs. To
allow a taxpayer to reopen the taxable year of the original
estimate would, moreover, be inconsistent with the annual
accounting principle upon which the Federal income tax is
predicated. The courts have long maintained:
Income tax liability must be determined for annual
periods on the basis of facts as they existed in each
period. * * * No other system would be practical in
view of the statute of limitations, the obvious
administrative difficulties involved, and the lack of
finality in income tax liability, which would result.
* * *
Estate of Block v. Commissioner, 39 B.T.A. 338, 341 (1939), affd.
sub nom. Union Trust Co. v. Commissioner, 111 F.2d 60 (7th Cir.
1940); accord Hillsboro Natl. Bank v. Commissioner, 460 U.S. 378,
377 & n.10, 378 n.11 (1983); Healy v. Commissioner, 345 U.S. 278,
284-285 (1953); Burnet v. Sanford & Brooks Co., 282 U.S. 359, 365
(1931).
It does not appear from the stipulated facts that an attempt
was made to correct the estimates reflected on Company's original
return for the taxable year ended October 31, 1988, by means of
an amended return. The implication of petitioners' argument,
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