- 9 -
stipulation of facts states that petitioner advocated that it was
an insurance company. There is nothing to support its contention
that it "proposed a compromise". After the examination ended,
the Commissioner issued a notice of deficiency. In its
Explanation of Adjustments, the notice of deficiency states:
"it is required that the taxpayer change the accounting methods
previously employed to methods permitted or required under the
provisions of the Code." (Emphasis supplied.) Petitioner was
required to submit to the audit, and it was required by the
notice of deficiency to change its accounting method.
Petitioner's situation falls squarely within the second sentence
of section 1.481-1(c)(5), Income Tax Regs. Petitioner's
accounting method change was "required as a result of an
examination of the taxpayer's income tax return".
Petitioner also contends that Rev. Proc. 92-20, supra,
violates equal protection. The revenue procedure provides that
the year of change depends on whether and when a taxpayer
requests a change of accounting method. Petitioner argues that
equal protection has been violated in its case because there were
no cases or other rulings that indicated that petitioner's
original method of accounting was erroneous. Petitioner attempts
to bolster its argument by pointing out that the IRS agent who
proposed that the warranty method be used was overruled by the
national office. According to petitioner, the fact that the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011