- 44 -
consolidated return regulations was a method of accounting. See
id. at 622. This Court subsequently followed Henry C. Beck
Builders, Inc. in Vernon C. Neal, Inc. v. Commissioner, T.C.
Memo. 1964-145, and in United Contractors, Inc. v. Commissioner,
T.C. Memo. 1964-68, affd. per curiam 344 F.2d 123 (4th Cir.
1965).
In another Court-reviewed opinion issued 5 years after Henry
C. Beck Builders, Inc., the Court again rejected the IRS's
argument that the intercompany transaction rules contained in the
consolidated return regulations were a method of accounting. See
Henry C. Beck Co. v. Commissioner, 52 T.C. 1 (1969), affd. per
curiam 433 F.2d 309 (5th Cir. 1970) (Henry C. Beck Co.). Citing
Henry C. Beck Builders, Inc., the Court stated that "Consolidated
returns are not a method of accounting but only a method of
reporting." Id. at 7-8. Later in the opinion, we reemphasized
this point: "As previously pointed out, it is well settled by
decisions of this Court that a consolidated return is merely a
method of reporting taxes, not a method of accounting." Id. at
12.
Respondent correctly points out that Henry C. Beck Builders,
Inc. and Henry C. Beck Co. involved the consolidated return
regulations in effect prior to 1966 (pre-1966 regulations), see
Henry C. Beck Co. v. Commissioner, supra at 11-12, and that the
case at bar involves the consolidated return regulations the
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