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method of accounting for interest income is an
"appropriate" method of accounting. In support of that
argument, petitioner noted that it had consistently used
the method for over 30 years, and it alleged that
historically it suffers an "unusually high incidence of
repossessions". Petitioner did not prove the allegation
of a high incidence of repossessions and appears to have
abandoned the argument that its method of accounting was
appropriate. Notwithstanding the abandonment of this
argument, it is clear that petitioner's method of
accounting for interest income did not clearly reflect
income. Furthermore, it is well within respondent's
discretion under section 446(b) to change a taxpayer's
method of accounting which, although consistently used
over a period of years, is erroneous and does not
clearly reflect income. E.g., Electric & Neon, Inc. v.
Commissioner, 56 T.C. 1324, 1333 (1971), affd. without
published opinion 496 F.2d 876 (5th Cir. 1974).
Loss Deduction From Amended Return
The stipulation of facts states as follows:
As an offset to the amounts reported in its
amended return as increases to taxable income
for 1990, the petitioner claimed a loss in
the amount of $336,912.00. Said claimed loss
remains in dispute between the parties.
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