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the omission9 or duplication10 of amounts solely by reason of that
change.
Because we have decided that an adjustment to income
pursuant to section 481(a) is warranted, we must consider two
contentions advanced by petitioners concerning the amount of the
adjustment. Petitioners contend that petitioner owned only a
one-half interest in certain BUF accounts,11 and that therefore
only one-half of the relevant balance of those accounts may be
included in the section 481(a) adjustment made with respect to
the change in the method of accounting for those accounts. At
trial, petitioner testified that he made agreements with certain
of his office managers to share the profits and losses of their
respective offices, as well as the BUF account for the office.
Petitioner produced two agreements, only one of which was in
effect on January 1, 1988, the relevant time for purposes of the
9 Although, even if, pursuant to the tax benefit rule, the
previously offset amounts in the BUF accounts would be reportable
in income at the time of their refund to petitioner, respondent
need not await that eventuality but may make the adjustment
provided by sec. 481(a) in the year of the accounting method
change. Western Casualty & Sur. Co. v. Commissioner, 571 F.2d
514, 519 (10th Cir. 1978), affg. 65 T.C. 897 (1976).
10 A duplication could occur when, pursuant to the new method
of accounting, deductions are claimed when disbursements are made
from the BUF accounts in issue because the amounts disbursed (to
the extent they do not represent accumulated interest) could have
already been offset against gross receipts at the time they were
paid into the accounts pursuant to petitioner's old method of
accounting.
11 Those accounts are identified as: Rankin-Johnson, Rankin-
Vallejo, Rankin-Carter, and Rankin-Williams.
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