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warrant an adjustment under section 481. But the cases
petitioners cite are readily distinguishable on their facts.
In Saline Sewer Co. v. Commissioner, T.C. Memo. 1992-236,
the taxpayer was a utility company that excluded customer
connection fees from gross income on the theory that they were
contributions to capital. We found that the mischaracterization
caused a permanent distortion of Saline Sewer's taxable income,
and accordingly respondent's recharacterization of these receipts
as taxable income did not give rise to a section 481 adjustment.
In Schuster's Express, Inc. v. Commissioner, 66 T.C. 588
(1976), the result turned in part on the unusual procedural
posture of the case. The Commissioner, who bore the burden of
proof, failed to establish that under the taxpayer's method of
reserve accounting for estimated insurance expenses "there was
any procedure or intention to restore the excessive deductions to
income in future years so as to properly reflect * * * [the
taxpayer's] total lifetime income." Id. at 596. In the absence
of proof by the Commissioner that the change was solely a matter
of timing, we declined to sustain a section 481 adjustment.
In Security Associates Agency Ins. Corp. v. Commissioner,
T.C. Memo. 1987-317, the taxpayer was required to include advance
payments of insurance commissions for the year when received
rather than for the following year when earned. We held that
although there had been a change in the taxpayer's method of
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