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v. Commissioner, 62 T.C. 469, 479-481 (1974), affd. 536 F.2d 874
(9th Cir. 1976). Accordingly, we consider cases dealing with
material distortions of income arising in connection with the
claim of deductions. In Van Raden v. Commissioner, 71 T.C. at
1105-1106, we set forth the following approach to considering the
question whether a distortion of income was material:
Because the method of accounting and the nature of
the trade or business are so interdependent, we
conclude that the distortion of income must not be
examined in a vacuum but in light of the business
practice or business activities which give rise to the
transaction which the Commissioner has determined must
be accorded a different accounting treatment. For
example, material distortions of income may occur if
the sales force of a business is more successful in
December than in January, yet such a distortion would
not require adjustment to clearly reflect income
because the distortion resulted from the business
activity itself. * * *
A material distortion of income generally does not occur
where a deferral of income arises in the regular course of
business and not from a manipulation of the cash method. Gold-
Pak Meat Co. v. Commissioner, 522 F.2d 1055, 1057 (9th Cir.
1975), remanding T.C. Memo. 1971-83. Courts have also considered
whether a business purpose exists for a transaction in deciding
whether a taxpayer's method of accounting for the transaction
materially distorts income. Frysinger v. Commissioner, supra at
528; Packard v. Commissioner, supra at 428-430; Van Raden v.
Commissioner, 71 T.C. at 1105-1106. A business purpose exists
where the taxpayer establishes a reasonable expectation of
receiving some business benefit from the aspect of the
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