- 10 - The case principally relied on by respondent, Diebold, Inc. v. United States, 891 F.2d 1579 (Fed. Cir. 1989), is distinguishable on its facts and did not involve a question of the adoption of a method of accounting in circumstances analogous to those presented in the instant case.5 Furthermore, petitioners' counsel informed respondent prior to trial of a memorandum opinion of this Court (Evans v. Commissioner, T.C. Memo. 1988-228) that held that a taxpayer did not adopt a method of accounting where the taxpayer erroneously reported items of income and did not consciously adopt the method. Respondent did not attempt to distinguish, or even discuss, that case in the posttrial briefs filed in the instant case. Moreover, as noted in our opinion on the merits, petitioner's use of the cash method to report the payments would have been contrary to the law governing the taxation of guaranteed payments, and such a method would not have been binding on petitioner even if he had adopted it. Sicard v. Commissioner, T.C. Memo. 1996-173. Consequently, we conclude that respondent's accounting method theory was unreasonable and that therefore respondent's position in the instant case was not substantially justified. Nalle v. Commissioner, 55 F.3d at 191-193. Respondent also objects to the date from which petitioners calculated the COLA applicable to the award of attorney's fees 5 A revenue ruling relied on by respondent, Rev. Rul. 90-38, 1990-1 C.B. 57, is similarly distinguishable.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
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