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record that suggests that the office managers reported on their
tax returns a portion of the income and expense associated with
their respective offices. Indeed, petitioners assert that
petitioners' income tax returns and the surety's ledgers with
respect to the BUF accounts in issue contain all the information
needed for purposes of the alternative method provided by section
481(b)(2), further discussed below, for computing the amount of
the additional tax to be paid as a result of the adjustment
required due to the change in the method of accounting for the
BUF accounts. Petitioners' assertions and the record as a whole
indicate that the full amount of the payments into the BUF
accounts were taken as offsets against the gross receipts of
petitioner's bail bond business reported on petitioners’ tax
returns, and petitioners do not contend otherwise. We conclude
that petitioners have not established that any of the BUF
accounts in issue were jointly owned. Accordingly, no
modification of the amount of the section 481(a) adjustment is
required for this reason.
Petitioners also contend that, in the event we decide that
section 481(a) applies in the instant case, the amount of tax
resulting from the adjustment should be limited to the amount
computed pursuant to section 481(b)(2).13 Respondent contends
13 Petitioners do not rely on the limitation provided by sec.
481(b)(1), and we do not consider it.
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