- 15 - taxpayer’s] method of computing insurance expense there was any procedure or intention to restore the excessive deductions to income in future years so as to properly reflect * * * [the taxpayer’s] total lifetime income. * * * [66 T.C. at 596.] Consequently, the Court concluded that the change in the taxpayer’s practice of deducting insurance expenses did not involve the question of the proper time for the taking of a deduction, and therefore was not a change in a method of accounting. Id. at 596-597. Accordingly, the Court concluded that no adjustment to the taxpayer’s income could be made pursuant to section 481(a) with respect to the balance of the reserve account attributable to closed years. Id. at 597-598. Subsequent cases have distinguished Schuster’s Express, Inc. v. Commissioner, supra, concluding that the practices in question involved issues of the timing of recognition of income, rather than of the permanent avoidance of its reporting. Knight-Ridder Newspapers, Inc. v. United States, supra; North Cent. Life Ins. Co. v. Commissioner, 92 T.C. 254 (1989); Copy Data, Inc. v. Commissioner, 91 T.C. 26 (1988); Primo Pants Co. v. Commissioner, 78 T.C. 705 (1982); Connors, Inc. v. Commissioner, 71 T.C. 913 (1979). Although petitioners argue that those cases are not applicable to the situation presented in the instant case, the circumstances noted by petitioners do not render the reasoning of those cases inapposite.7 Knight-Ridder Newspapers, Inc. v. 7 For example, certain of those cases involve accrual method (continued...)Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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