- 6 -
Section 1.446-1(c)(1)(iv)(a), Income Tax Regs., further provides
that, while combinations of methods that clearly reflect income
and are consistently used will be permitted, nonetheless,
a taxpayer who uses the cash method of accounting in
computing gross income from his trade or business shall
use the cash method in computing expenses of such trade
or business. * * *
Thus, it is clear that petitioner may not deduct certain expenses
using the accrual method when its primary method for reporting
income is the cash method. Miele v. Commissioner, 72 T.C. 284,
291 (1979); Connors, Inc. v. Commissioner, 71 T.C. 913, 916-917
(1979). The fact that petitioner has used this combination of
cash and accrual accounting in the past is of no consequence. A
consistent application of an improper method or combination will
not ratify petitioner's mistake nor prevent respondent's
correction of it. Miele v. Commissioner, supra at 291.
To reflect the foregoing,
Decision will be entered
for respondent.
Page: Previous 1 2 3 4 5 6
Last modified: May 25, 2011