- 9 -
As of January 1, 1988, petitioner wholly owned the following
BUF accounts: James M. Rankin (Ann); James M. Rankin-Hayward;
and James M. Rankin #2.
OPINION
Because section 481(a)3 applies only if there is a change in
a method of accounting, the parties’ dispute in the instant case
centers on whether the change in the treatment for tax purposes
of payments into and disbursements from the BUF accounts
maintained in the course of petitioner’s bail bond business is a
change in method of accounting. If so, respondent may make an
3
Sec. 481(a) provides:
SEC. 481. ADJUSTMENTS REQUIRED BY CHANGES IN METHOD OF
ACCOUNTING.
(a) General Rule.--In computing the taxpayer’s taxable
income for any taxable year (referred to in this section as
the “year of change”)--
(1) if such computation is under a method of
accounting different from the method under which the
taxpayer’s taxable income for the preceding taxable year
was computed, then
(2) there shall be taken into account those
adjustments which are determined to be necessary solely
by reason of the change in order to prevent amounts from
being duplicated or omitted, except there shall not be
taken into account any adjustment in respect of any
taxable year to which this section does not apply
unless the adjustment is attributable to a change in the
method of accounting initiated by the taxpayer.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011