Ward AG Products, Inc. - Page 17

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               The taxpayer bears the burden of proving there has been an             
          abuse of discretion by the Commissioner.  Asphalt Prods. Co. v.             
          Commissioner, 796 F.2d 843, 848 (6th Cir. 1986), affg. on this              
          issue Akers v. Commissioner, T.C. Memo. 1984-208, revd.                     
          on another issue 482 U.S. 117 (1987).  Taxpayers must show that             
          the Commissioner’s action was arbitrary, capricious, or without             
          sound basis in fact.  Capitol Fed. Sav. & Loan Association & Sub.           
          v. Commissioner, 96 T.C. 204, 213 (1991); Buzzetta Constr. Corp.            
          v. Commissioner, 92 T.C. 641, 648 (1989); Mailman v.                        
          Commissioner, 91 T.C. 1079, 1084 (1988); Pulver Roofing Co. v.              
          Commissioner, 70 T.C. 1001, 1011 (1978).  Petitioner has not made           
          that showing; there is no evidence that respondent's                        
          determination was arbitrary.                                                
               Petitioner contends that its total income for its 1988 to              
          1993 taxable years was about the same under the cash and accrual            
          methods of accounting.  Petitioner contends that from 1988 to               
          1993 under the cash method of accounting its total sales were               
          $25,523,854, taxable income was $1,157,437, and income tax was              
          $375,940.  Petitioner also contends that from 1988 to 1993 under            
          the accrual method of accounting its total sales were                       
          $25,573,570, income before taxes was $1,084,420, and its                    
          estimated income tax was $361,618.  These comparisons do not                
          establish that respondent committed an abuse of discretion.                 
          Petitioner must use the accrual method of accounting and                    
          inventories because merchandise is a material income-producing              




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