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all Rule references are to the Tax Court Rules of Practice and
Procedure. After concessions1 by the parties, the issues to be
decided are:
(1) Whether petitioner is required to change from the cash
method of accounting to the accrual method of accounting;
(2) if petitioner is required to change to the accrual
method of accounting, to what extent, if any, adjustments were
properly made under section 481; and
(3) whether petitioner is liable for the accuracy-related
penalty under section 6662(a).
FINDINGS OF FACT
Petitioner is a California corporation organized in 1980.
At the time of filing the petition in this case, petitioner's
principal place of business was in Oakland, California.
Petitioner is owned 76 percent by its president, Clifford Asher
(Mr. Asher), and 24 percent by Mr. Asher's son, Donald Asher.
Petitioner is in the lithography or commercial printing
business. The business was established by a prior owner in 1937.
In 1973, Mr. Asher purchased the business from the prior owner.
In 1980, Mr. Asher incorporated the business and changed its name
to Golden Gate Litho.
1 Respondent concedes that petitioner is entitled to deduct
commission expenses in the amount of $21,888. Petitioner
concedes that it is not entitled to deduct a loss of $6,215 on
the sale of an automobile.
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