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taxpayer's books and records and all reports to shareholders,
partners, other proprietors or beneficiaries and for credit
purposes. Rev. Proc. 71-21, sec. 3.11. Petitioner uses the same
method for financial, regulatory, and tax accounting purposes and
thus satisfies this requirement. Taxpayers who avail themselves
of this procedure must maintain adequate books and records so
that the amount deferred on the income tax return for any year
can be verified. Rev. Proc. 71-21, sec. 4. The parties have
stipulated that petitioner's books and records satisfy this
requirement.
Petitioner relies on Rev. Proc. 71-21 for its method of
accounting for these annual credit card fees. Section 3.14 of
Rev. Proc. 71-21 provides that the deferral of income in
accordance with this procedure will be treated as an acceptable
method of accounting under section 446 as long as the method is
consistently used by the taxpayer. Petitioner consistently used
the same method of accounting for these fees from the time it
instituted the fees in October of 1980 through the taxable year
1985.9
Respondent cites section 3.06 of Rev. Proc. 71-21 and argues
that since petitioner has not correlated the fees to specific
services, petitioner is unable to avail itself of Rev. Proc. 71-
9 Respondent seems to argue on brief that petitioner
improperly changed its accounting method without obtaining
respondent's consent. That is not the case.
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