- 22 -
Van Raden v. Commissioner, 71 T.C. at 1102-1103. Where a
taxpayer's method of accounting results in a material distortion
of income, the Commissioner is empowered by section 446(b) to
require use of a different accounting method so that income is
clearly reflected. Commissioner v. Van Raden, 650 F.2d at 1048-
1049; Burck v. Commissioner, 533 F.2d 768, 773 (2d Cir. 1976),
affg. 63 T.C. 556 (1975); Keller v. Commissioner, 79 T.C. 7, 38-
41 (1982), affd. 725 F.2d 1173 (8th Cir. 1984); Baird v.
Commissioner, 68 T.C. 115, 131 (1977) and cases cited therein;
see also Clement v. United States, 217 Ct. Cl. 495, 580 F.2d 422,
430-431 (1978). The question of whether a taxpayer's method of
accounting materially distorts or clearly reflects income is one
of fact and is to be resolved on a case-by-case basis. Cole v.
Commissioner, supra at 749; Ansley-Sheppard-Burgess Co. v.
Commissioner, supra at 371; Packard v. Commissioner, 85 T.C. 397,
433 (1985).
The cases that involve the question of whether a material
distortion has occurred with respect to the receipt of income
take into account the same considerations and factors that are
examined in cases involving the question of whether a material
distortion has occurred with respect to the claim of a deduction.
Compare Ansley-Sheppard-Burgess Co. v. Commissioner, supra at
374-375; Applied Communications, Inc. v. Commissioner, T.C. Memo.
1989-469; C.A. Hunt Engg. Co. v. Commissioner, T.C. Memo. 1956-
248, with Van Raden v. Commissioner, 71 T.C. at 1096-1106; Sandor
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011