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Petitioner contends that Vineyards was permitted to use the
cash method, that the method was generally accepted in the
vineyard industry, that it was consistently applied by Vineyards,
and that it clearly reflected Vineyards' income. Petitioner
argues that it is not required to show a business purpose for the
deferred payment arrangement with Winery but that such a purpose
exists, namely the establishment of a long-term relationship
between Vineyards and Winery. Petitioner urges that the
relationship of Vineyards to Winery is irrelevant to the question
whether Vineyards may use the cash method of accounting.
Generally, section 446(b) provides that, if a taxpayer's
method of accounting does not clearly reflect income, then the
computation of taxable income shall be made pursuant to a method
that, in the opinion of the Commissioner, does clearly reflect
income. Section 446(b) vests the Commissioner with broad power
to determine whether the accounting methods used by a taxpayer
clearly reflect income, Thor Power Tool Co. v. Commissioner, 439
U.S. 522, 532 (1979), and to require revision of a method that
does not clearly reflect income, Commissioner v. Van Raden, 650
F.2d 1046, 1048 (9th Cir. 1981), affg. 71 T.C. 1083 (1979); Cole
v. Commissioner, 586 F.2d 747, 749 (9th Cir. 1978), affg. 64 T.C.
1091 (1975); Stephens Marine, Inc. v. Commissioner, 430 F.2d 679,
686 (9th Cir. 1970), affg. T.C. Memo. 1969-39. "An action taken
by the Commissioner under section 446 will be set aside by the
courts only if there is a clear abuse of discretion." Cole v.
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