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Associates v. Commissioner, T.C. Memo. 1992-239; Surtronics, Inc.
v. Commissioner, T.C. Memo. 1985-277.
The substantial-identity-of-results test was first
articulated in Wilkinson-Beane, Inc. v. Commissioner, supra. The
taxpayer had argued that the disparity in gross income under the
cash method and an accrual method was inconsequential. The Court
of Appeals disagreed, stating:
The standard we apply is whether the taxpayer's method
of accounting reflects his income with as much accuracy
as standard methods of accounting permit. In our view,
this means that the taxpayer must demonstrate
substantial identity of results between his method and
the method selected by the Commissioner. * * * [Id.
at 356; fn. ref. omitted.]
We recently had occasion to address the substantial-
identity-of-results test in Ansley-Sheppard-Burgess Co. v.
Commissioner, supra. In that case, the Commissioner argued,
inter alia, that in order to show an abuse of discretion by the
Commissioner a taxpayer using the cash method to report income
must, in all instances, be able to show a substantial identity of
results between the cash method and the method of accounting
which the Commissioner determines clearly reflects the taxpayer's
income. We disagreed, stating:
Respondent's contention that we must apply the
substantial-identity-of-results test in cases where the
taxpayer is not required to maintain an inventory is
without support in the case law. * * * [Id. at 377.]
The Court of Appeals for the Sixth Circuit, to which the
instant case would be appealable absent stipulation to the
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