- 39 -
We do not understand the statements of respondent's counsel
during his opening statement at trial to be a concession by
respondent that respondent placed Mountain State Ford on a non-
LIFO method that utilizes replacement cost, and we reject peti-
tioner's contention to the contrary. Even if respondent's
counsel had made such a concession during his opening statement
at trial, we would not consider it to be a concession that binds
respondent. That is because, inter alia, any such concession
would have been contrary to respondent's position as set forth in
paragraph 51 of the stipulation of facts, which was made part of
the record in this case immediately before the Court allowed
counsel for the parties to make opening statements. The position
of respondent in paragraph 51 of the stipulation of facts is
totally consistent with the notice. In the notice, respondent
did not terminate Mountain State Ford's elections to value its
parts inventory under the dollar-value, link-chain LIFO method
and to use the most recent purchases method in order to determine
the current-year cost of its parts pool.18 Mountain State Ford
remains on those methods and cannot account for its parts inven-
tory on any other methods without first receiving permission from
18 Pursuant to sec. 3.01(c), Rev. Proc. 79-23, 1979-1 C.B.
564, "Failure by the taxpayer to value its LIFO inventory at cost
for Federal income tax purposes, for the year preceding the LIFO
election, the year of the LIFO election, and all subsequent
taxable years" may warrant the termination of that taxpayer's
LIFO election. However, such termination is within the discre-
tion of respondent and is not mandatory. See Consolidated
Manufacturing, Inc. v. Commissioner, 111 T.C. 1, 38 (1998). In
the present case, respondent chose not to exercise that discre-
tion and did not terminate Mountain State Ford's LIFO election.
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