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accounting. For 1993, petitioners changed to the cash method
without the Commissioner's permission to do so, and they used a
method of valuing inventory that fails to comport with any
recognized method. Respondent, in essence, placed petitioners on
the cash method of accounting and the retail method of valuing
inventory, which is the method that most closely resembles
petitioners' inventory method. Given respondent's broad
authority pursuant to section 446, the paucity of information
that petitioners maintained with respect to cost of goods sold,
and the fact that petitioners did not have a valid method of
accounting for reporting inventories, we reject petitioners'
contention.
Accordingly, respondent's determinations were not arbitrary
and petitioners must prove the correct amount of their tax
liability by a preponderance of the evidence.
II. Adjustments to Respondent's Determinations
The Court may redetermine petitioners' tax liability if and
to the extent that petitioners demonstrate by a preponderance of
the evidence that respondent's determination is wrong.
Anastasato v. Commissioner, supra at 888; Miller v. Commissioner,
237 F.2d 830, 838 (5th Cir. 1956), affg. in part, revg. in part
and remanding T.C. Memo. 1955-112. With respect to cost of goods
sold, to the extent the cost of hunting and fishing licenses was
included in purchases for the years in issue, such costs should
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