E.W. Richardson - Page 21

                                       - 21 -                                         
          made an unauthorized change in method of accounting when it                 
          changed the definition of such units to body size in its LIFO               
          inventory computations subsequent to Richardson I.  Petitioner              
          asserts that Investments elected to define its inventory units              
          for its new car pool by body size, and it consistently applied              
          the body size definition from the year of election through the              
          computations subsequent to Richardson I.  In the alternative,               
          petitioner asserts that respondent implicitly consented to a body           
          size definition of its inventory units.                                     
               To determine the scope of a taxpayer’s LIFO election, we               
          examine the facts and circumstances of the case.  First Natl.               
          Bank v. Commissioner, 88 T.C. 1069, 1080 (1987).  In First Natl.            
          Bank, we addressed the issue of whether a taxpayer had elected to           
          include soil aggregate in its LIFO inventory.  After analyzing              
          the scope of the taxpayer’s business, the information provided on           
          its Form 970, its tax returns, and other business records, we               
          held that the taxpayer had elected to include the soil aggregate            
          in its LIFO inventory.  Id. at 1079-1080.  Petitioner has the               
          burden of proof on this issue.  Rule 142(a).                                
               There is some language in Richardson I which suggests that             
          Investments defined its inventory units by model code.                      
          Richardson Invs., Inc. v. Commissioner, 76 T.C. at 739.  However,           
          as discussed more fully infra p. 36, this finding was not                   
          material to the decision in that case.  Furthermore, Investments'           
          comptroller and Investments' C.P.A. both testified that                     




Page:  Previous  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  Next

Last modified: May 25, 2011