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national office did not concur with the field agent means
petitioner had no reason to presume its method was incorrect.
Petitioner's argument is fundamentally flawed. First, even
if one method advocated by the IRS was not adopted, it does not
follow that petitioner's existing method was correct. Section
1.446-1(a)(2), Income Tax Regs., acknowledges that the same
method of accounting cannot be used by all taxpayers. It is
required that the method chosen clearly reflect income. In
petitioner's case, it agreed that it was an insurance company.
Thus, it is required by statute to use the method of accounting
prescribed by section 832.
Second, petitioner injects a subjective element into the
Code that does not exist. There is nothing in the statute or
regulations concerning what to do if the taxpayer thought,
incorrectly, that the method used clearly reflected income. The
IRS is concerned with collecting the correct amount of revenue.
Nowhere in the applicable provisions of the Code does the
taxpayer get credit if it thought it correctly calculated income.
If the taxpayer acts in good faith, but is incorrect, it owes the
deficiency. If it is willfully or negligently incorrect, it may
also owe penalties and additions to tax. Petitioner here owes
only the deficiency.
The purpose of Rev. Proc. 92-20, 1992-1 C.B. 685, is to
"encourage prompt voluntary compliance" and correct the
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