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fee, inclusion in income should be ratable as the fees are
"earned".13 We agree with petitioner.
Section 446(a) provides that taxable income shall be
computed under the method of accounting on the basis of which the
taxpayer regularly computes its income in keeping its books. The
accrual method of accounting is one permissible method of
computing taxable income. Sec. 446(c)(2). Petitioner is an
accrual method taxpayer and has kept its books regularly in
accordance with this method.
However, financial accounting and income tax accounting
methods have divergent objectives. Thor Power Tool Co. v.
Commissioner, 439 U.S. 522, 542-543 (1979). "Given this
diversity, even contrariety, of objectives, any presumptive
equivalency between tax and financial accounting would be
unacceptable." Id. The general rule specifying use of the
taxpayer's method of accounting is limited to cases where such
method clearly reflects income. Id. at 541; see American
13 For the first time in its brief, petitioner raised the
statute of limitations as a defense, arguing that respondent is
precluded from including entry fees and cluster home receipts
received during those years now barred by sec. 6501. The defense
of the statute of limitations must be affirmatively pleaded.
Rule 39. It is untimely for petitioner to raise it in its brief,
and we need not consider it. Brown v. Commissioner, 24 T.C. 256,
264 (1955); Rule 34(b)(4) and (5); Rule 41.
Additionally, adjustments in accordance with sec. 481, as
these would be if respondent is correct in her position, are not
precluded by the statute of limitations. Knight-Ridder
Newspapers, Inc. v. United States, 743 F.2d 781, 797 (11th Cir.
1984); Graff Chevrolet Co. v. Campbell, 343 F.2d 568, 571-572
(5th Cir. 1965); W.S. Badcock Corp. v. Commissioner, 59 T.C. 272,
288-289 (1972), revd. on another issue 491 F.2d 1226 (5th Cir.
1974).
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