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partnership’s self-employment income by the same amount. Unless
otherwise noted, all section references are to the Internal
Revenue Code (Code) in effect for the year in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
The issue to be decided is whether respondent's
determination that Vineyards must report its income from the sale
of grapes and other property on the accrual method, rather than
the cash receipts and disbursements method, in order to clearly
reflect its income was an abuse of respondent’s discretion.
FINDINGS OF FACT
Some of the facts have been stipulated for trial pursuant to
Rule 91. The parties’ stipulations of fact are incorporated
herein by reference and are found as facts in the instant case.
At the time the petition in the instant case was filed,
Vineyards maintained its principal place of business in Oakville,
California.
General Background
Vineyards
Vineyards was organized on May 26, 1981, as a California
limited partnership to acquire and operate a vineyard in
California's Napa Valley. Mr. Groth and his wife Judith
(sometimes referred to herein together as the Groths) are the
general partners of Vineyards and own an 85-percent interest in
the partnership. Trusts for the benefit of each of the Groths'
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Last modified: May 25, 2011