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Enters. & Subs. v. Commissioner, 101 T.C. 1 (1993) (gas company);
Kansas City S. Indus., Inc. v. Commissioner, 98 T.C. 242 (1992)
(railroad); Oglethorpe Power Corp. v. Commissioner, T.C. Memo.
1990-505 (electric company); American Tel. & Tel. Co. v.
Commissioner, T.C. Memo. 1988-35 (telephone company). For
Federal tax purposes, if the generally accepted method of
accounting of a taxpayer is made compulsory by a regulatory
agency, and the method clearly reflects income, it is virtually
presumed to be valid for Federal tax purposes. Commissioner v.
Idaho Power Co., 418 U.S. 1, 15 (1974). The FCC accounted for
drop and block in account No. 232 until 1984, when it was
accounted for in account No. 242.1 or 242.3. Respondent looks to
the administrative justifications for such changes. Although
there may have been legitimate and persuasive reasons for the
administrative change in accounting by the FCC, as well as some
industry support, we do not need to reach that issue. It is not
for us today to decide whether the action of the FCC was valid,
justified, or authorized.
Instead the analysis begins with the plain meaning of the
statute, and for reasons which follow, ends there. Respondent
contends that the class lives have never changed; that is,
account No. 242 has always been 15-year public utility property.
That is only one-half of the analysis, for we must also apply
those class lives to property as they would have been applied on
January 1, 1981. The statute, in relevant part, provides that
“`present class life’ means the class life (if any) which would
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