Leon L. Sicard and Eleanor Sicard - Page 10

                                       - 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

Last modified: May 25, 2011