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The substantial-identity-of-results test is not applicable
under the circumstances present in the instant case. As we read
Asphalt Products, it is clear that the focus of the Court of
Appeals for the Sixth Circuit was on the mismatching of the
taxpayer's receipts from the sale of products with its cost of
goods sold. See, e.g., 796 F.2d at 847. Indeed, that court
stated:
If the temporary and rather insignificant increase in
inventories of raw materials had been the only basis
for the Commissioner's determination, we would have
been inclined to find an abuse of discretion. We do
not construe the Code provisions and regulations
relating to inventories in the absolute terms adopted
by the Commissioner and the Tax Court. However, the
taxpayer's method of accounting did not produce an
accurate picture of its 1974 income. The income tax is
structured on an annual basis. Using the cash method,
the cost of materials sold in 1974 was deducted on the
1974 return, yet the proceeds from that portion of the
same sales represented by the accounts receivable were
not included in the taxpayer's gross receipts as
reported on its return. Unlike the inventory item, the
accounts receivable were not negligible before 1974 and
did not shrink even to their former size at the end of
the oil emergency. The taxpayer had accounts
receivable of $238,000 at the end of 1976. These facts
supported the Commissioner's determination that the
cash receipts and disbursements method did not clearly
reflect the taxpayer's income. [Id. at 849.]
In the instant case, petitioners report patient receivables
and related expenses attributable to the Pharmacy and Central
Supply accounts on the accrual method. Consequently, the
presence of the substantial accounts receivable at yearend does
not mean "that the cost of goods sold had been deducted while the
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