-47-
goods produced by such manufacturer or processor and
reflected in the inventory. * * *[13] [Emphasis added.]
We also disagree with petitioner's contention that section
1.472-1(c), Income Tax Regs., "provides * * * evidence of the
validity of Petitioner's [sic] LIFO election." As discussed
above and as made clear by that regulation, a manufacturer or
processor may elect to apply the LIFO inventory method to one or
more raw materials only, including those included in goods in
process and in finished goods. Consolidated could have elected,
but did not elect, to apply the raw material content LIFO
inventory method to its new parts and/or its customer cores.
Sec. 1.472-1(c), Income Tax Regs. It could not have elected to
apply that method to its new parts, labor, and overhead only or
to its labor and overhead only. Id. We conclude that section
1.472-1(c), Income Tax Regs., does not permit Consolidated's LIFO
method and does not provide "evidence of the validity of * * *
[Consolidated's] LIFO election."14
13 Under the raw material content LIFO inventory method,
"The only adjustment to the closing inventory is the cost of the
raw material [for which a taxpayer elects the raw material
content LIFO inventory method]; the processing costs and overhead
cost are not changed." Sec. 1.472-1(c), Income Tax Regs.,
Example (1) (last sentence).
14 Although petitioner concedes that it may not be used or
cited as precedent, sec. 6110(j)(3), petitioner relies on Tech.
Adv. Mem. 94-45-004 (Apr. 25, 1994) in an effort to show that
respondent has permitted a taxpayer to account for one or more,
but less than all, of its raw materials and all of its labor and
overhead under the LIFO inventory method. It is not at all clear
from Tech. Adv. Mem. 94-45-004 what, if any, of the labor and
(continued...)
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