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had failed to take into income. To overcome respondent's
determination as to this accounting adjustment, petitioner
bears a heavy burden of proof in that it must show that
respondent's determination is arbitrary and unsupported by
any basis in law. RCA Corp. v. United States, 664 F.2d
881, 886 (2d Cir. 1981); Prabel v. Commissioner, 91 T.C.
1101, 1112 (1988), affd. 882 F.2d 820 (3d Cir. 1989).
Petitioner's position that respondent's adjustment
does not comport with the accrual method of accounting
and is an erroneous method of accounting is based upon
the premise that the above difference is interest that
did not accrue in 1990 or in any prior year. However,
petitioner has not introduced any evidence to rebut
respondent's determination or to explain the difference.
Contrary to the premise of petitioner's argument, the
ledger cards for loans outstanding at the end of 1990
substantiate deferred interest of $1,596,968 less than
the ending balance of the deferred interest account as
shown on petitioner's balance sheet. We find that
petitioner has not proven that respondent abused her
discretion by determining that the difference described
above is interest that accrued prior to 1991. Accordingly,
we hereby sustain respondent's determination. See Prabel
v. Commissioner, supra.
Before leaving this issue, we note that petitioner
made a halfhearted attempt at trial to argue that its
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