- 28 - Similarly, petitioner contends that it does not need respondent's consent to change from treating the bonuses incorrectly to treating them correctly.5 Respondent does not dispute that Chasin, Hanson, and Searing are related for purposes of section 267(a). However, even if section 267(a) applies, we conclude for reasons discussed next that petitioner would need respondent's consent to change the year it deducts the officers' bonuses. 2. Whether Changing the Year Petitioner Deducts Bonuses Is a Change of a Material Item for Purposes of Section 446(e) We first decide whether changing the year petitioner deducts its officers' bonuses is a change in the treatment of a material item for purposes of section 446(e). A taxpayer generally must have the consent of the Secretary to change the method of accounting it uses for material items. Sec. 446(e); Pacific Enters. & Subs. v. Commissioner, 101 T.C. 1, 18 (1993); Wayne Bolt & Nut Co. v. Commissioner, 93 T.C. 500, 509 (1989); Standard Oil Co. v. Commissioner, 77 T.C. 349, 380 (1981); secs. 1.446-1(e)(2)(ii)(a), 1.481-1(a)(1), Income Tax 5Respondent alternatively contends that petitioner complied with sec. 267(a)(2) because petitioner's officers constructively received their bonuses in the year in issue. We need not decide this issue because we conclude that sec. 267(a) does not apply, and if it did, petitioner requires respondent's consent to change the year it deducts its officers' bonuses.Page: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Next
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