E.W. Richardson - Page 5

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               The primary issue in Richardson I was whether Investments              
          “properly adopted the use of a single LIFO inventory pool in                
          computing inventory values pursuant to the dollar-value, link-              
          chain LIFO method”.  Id. at 737.  Investments argued that it was            
          entitled to use a single pool for new cars and new trucks, and              
          the Commissioner argued that each model line3 should constitute a           
          separate dollar-value pool.  Id. at 745.  The Court rejected                
          Investments’ method of utilizing a single pool for new cars and             
          new trucks, and it rejected the Commissioner's single pool per              
          model line argument.  Id. at 747.  Rather, the Court held that              
          “new cars and new trucks should be placed in separate pools.”               
          Id. at 748.                                                                 
               After the opinion in Richardson I was filed (May 11, 1981),            
          Investments recomputed its taxable year 1974 LIFO inventory                 
          calculation, placing new cars and new trucks in separate pools.             
          The calculation was submitted to the Court under the Court’s Rule           
          155 procedure, and a decision was entered.  Investments and the             
          Commissioner reached an agreement on Investments’ inventory                 
          calculations for taxable years 1975, 1976, and 1977, conforming             
          those calculations to the decision in Richardson I.  For taxable            
          years 1978, 1979, and 1980, Investments amended its tax returns             
          to conform its inventory calculations to the decision in                    
          Richardson I.                                                               

          3    The parties have stipulated that vehicle “model lines” are             
          the different vehicle product lines offered by the manufacturers;           
          for example, Ford Motor Co. offers the Mustang model line, the              
          Escort model line, etc.                                                     



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