- 29 -
Commissioner, 104 T.C. at 377; Austin v. Commissioner, T.C. Memo.
1997-157. Thus, petitioner is not required to show a substantial
identity of results for this Court to find that respondent abused
her discretion in changing petitioner's method of accounting.
Respondent required petitioner to change from an accounting
method which clearly reflects income to an alternate method of
accounting merely because respondent considers the alternate
method to more clearly reflect its income. We previously have
held that to do so exceeds the bounds of her discretion.
On the basis of the facts of the instant case--including the
fact that petitioner has consistently used the cash method of
accounting without any evidence that it attempted to prepay
expenses unreasonably or purchase supplies in advance, does not
have inventories and is not required to use an inventory method
of accounting, and is not otherwise required by the Code or
regulations to use the accrual method of accounting--we hold that
respondent's determination that petitioner's use of the cash
method of accounting did not produce a clear reflection of income
was an abuse of discretion.
To reflect the foregoing,
Decision will be entered
for petitioner.
Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Last modified: May 25, 2011