Richard D. Hudson and Betty L. Hudson - Page 7

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          Ridder Newspapers, Inc. v. United States, supra (newsprint used             
          in connection with a newspaper publishing business);  Wilkinson-            
          Bean v. Commissioner, 420 F.2d. at 352 (purchase and sale of                
          caskets maintained by a funeral home); see also Thompson Elec.,             
          Inc. v. Commissioner, T.C. Memo. 1995-292 (materials used by an             
          electrical contractor);  J.P. Sheahan Associates v. Commissioner,           
          T.C. Memo. 1992-239 (roofing materials used in a roofing repair             
          business);  Surtronics, Inc. v. Commissioner, T.C. Memo. 1985-277           
          (metals used by a taxpayer in its electroplating business).  We             
          find critical the fact that petitioner's sale of gems was the               
          only source of income from his business.                                    
               Petitioner argues that he has consistently used the cash               
          method from the start of his business, and that the cash method             
          is (1) authorized by the Internal Revenue Code and (2) clearly              
          reflects his income.  Under the facts at hand, however, we                  
          conclude that the cash method is not an authorized method for               
          reporting petitioner's purchases and sales of gems.2  Because the           
          cash method is not an authorized method, the Commissioner did not           
          commit an abuse of discretion in changing petitioner's method to            
          an authorized method.  An accrual method is authorized for the              

               2 In this regard, the record does not indicate that the                
          results under the cash method would be substantially identical              
          with the results under an accrual method.  See Wilkinson-Bean,              
          Inc. v. Commissioner, 420 F.2d 352 (1st Cir. 1970), affg. T.C.              
          Memo. 1969-79; Ansley-Sheppard-Burgess Co. v. Commissioner, 104             
          T.C. 367, 377 (1995);                                                       

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