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invoking the accrual method without a serious attempt to comply
with the rules and regulations governing that method is simply
not sufficient. Respondent has no unilateral power to value
inventory and allocate amounts to accounts receivable and
payable as he pleases in complete disregard of the Internal
Revenue Code and the regulations. To do so is an abuse of
respondent's discretion.
Respondent contends that petitioner must show a
substantial identity of results between the cash method and the
method of accounting respondent imposed in order to show an
abuse of discretion. We disagree.
The substantial identity of results test is applicable
when the taxpayer is required to maintain inventories and the
Commissioner has required the taxpayer to compute its income on
a proper accrual method of accounting as provided in the
regulations. We think it would be an abuse of the Court's
discretion to require petitioner to show that the cash method
it has consistently used produces substantially the same
results as the arbitrary and erroneous method respondent
imposed.
Respondent's adjustments based on the improper method
increased petitioner's income by $36,002 for the taxable year
ending May 31, 1991, but decreased petitioner's income by
$113,875 for the taxable year ending May 31, 1992, and created
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