-44- Petitioner also relies on section 1.472-1(c), Income Tax Regs., to support the validity of Consolidated’s LIFO method. Petitioner asserts: Respondent apparently believes that Treasury Regulation 1.472-1(c) supports her position in this matter. To the contrary. Treasury Regulation Section 1.472-1(c) contradicts her argument that the LIFO inventory method may only be elected with respect to goods. Under the raw material content method, a taxpayer's LIFO election is limited to the cost of raw materials, including the cost of the raw material content of work-in-progress and finished goods. Treas. Reg. � 1.472-1(c). The Regulation describes the manner in which a taxpayer may segregate the cost of one or more raw materials from work-in-progress and finished goods and value those costs using LIFO, while all other costs associated with work-in-progress and the finished good are valued under the FIFO convention. Thus, a taxpayer using the raw material content method elects to value the cost of raw materials (including the cost of raw materials incorporated into work-in-progress and finished goods) using the LIFO convention, not the raw material themselves. Rather than support her position in this matter, Treasury Regulation Section 1.472-1(c) provides further evidence of the validity of Petitioner's [sic] LIFO election. In addition, Respondent's attempt to characterize the raw material content method as the single "permissive variance to the inclusion of the total goods in LIFO" is not an accurate statement of the law. * * * We disagree with the foregoing contentions of petitioner as to what section 1.472-1(c), Income Tax Regs., which permits a taxpayer to elect what we shall refer to as the raw material content LIFO inventory method, provides and allows. We reject petitioner’s position that that regulation "contradicts * * * [respondent’s] argument that the LIFO inventory method may only be elected with respect to goods." Section 1.472-1(c), Income Tax Regs., which is virtually identical to the 1944 amendment toPage: Previous 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 Next
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