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Furthermore, we do not believe that respondent argues that
on a separate company basis either GM or GMAC changed its methods
of accounting for the rate support payments or discount income.
Based on the foregoing, we conclude that the consolidated
return regulations in effect during the year in issue constituted
a method of reporting and not a method of accounting. Therefore,
the GM group did not have to obtain the Secretary's consent
before changing how it reported the rate support deductions on
its consolidated return.
III. Deferral of the Rate Support Payments
Respondent's secondary argument is: (1) The rate support
payments GM made to GMAC were part of intercompany transactions
subject to the matching rule contained in section 1.1502-
13(b)(2), Income Tax Regs.; (2) the corresponding item of income
to the rate support deductions was the discount income GMAC
earned over the term of the RISC's/fleet loans; and (3) GM should
have deferred its rate support deductions until GMAC took the
corresponding item of income into account.
Petitioner counters that the rate support deductions were
not subject to the matching rule contained in section 1.1502-
13(b)(2), Income Tax Regs., because: (1) The rate support
payments were not income to GMAC; therefore they could not have
been the corresponding item of income to the rate support
deductions; (2) the discount income that GMAC earned from
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