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Unless otherwise indicated, all section references are to
the Internal Revenue Code as in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
After concessions, the principal issue we must decide
centers around whether a change in the practice of offsetting,
against the gross receipts of petitioner James M. Rankin's
(petitioner) bail bond business, payments made into certain
accounts maintained for him as part of that business is a change
in a method of accounting. If the change in the practice is a
change in a method of accounting, then respondent may, pursuant
to section 481(a), make an adjustment increasing petitioners'
income in connection with the change.
FINDINGS OF FACT
Some of the facts have been stipulated for trial pursuant to
Rule 91 and are incorporated herein by reference. We find as
facts herein the facts stipulated by the parties.
At the time of filing the petition in the instant case,
petitioners resided in Union City, California. Petitioner
Shirley Rankin is a petitioner solely by reason of having filed
joint returns with petitioner. Petitioner maintained his books
and filed his Federal income tax returns using the cash receipts
and disbursements method of accounting.
Petitioner is licensed as a bail bond agent by the
California Department of Insurance and, since 1968, has been
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