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to inventory the drugs, and that petitioner was required to use
an accrual method to account for this inventory in order to
reflect its income clearly. Petitioner asserts that it is not a
merchandising business but a provider of services; to wit,
chemotherapy treatments for patients stricken with cancer.
Petitioner argues that it need not maintain inventories for the
chemotherapy drugs used in the treatments.
We agree with petitioner that it is not required to
inventory its chemotherapy drugs. We are mindful of the broad
discretion accorded the Commissioner in applying sections 446 and
471. Taxpayers challenging the Commissioner’s authority must
prove that the Commissioner’s determination is “clearly unlawful”
or “plainly arbitrary”. See Thor Power Tool Co. v. Commissioner,
439 U.S. 522 (1979); see also Wal-Mart Stores, Inc. & Subs. v.
Commissioner, T.C. Memo. 1997-1, affd. 153 F.3d 650 (8th Cir.
1998). The fact that the Commissioner has broad authority under
section 446(b), however, does not mean that the Commissioner may
change a taxpayer’s method of accounting with impunity. See,
e.g., Prabel v. Commissioner, 91 T.C. 1101, 1112-1113 (1988),
affd. 882 F.2d 820 (3d Cir. 1989). The Commissioner, for
example, may not change a taxpayer's method of accounting from
one that clearly reflects income to another one that the
Commissioner believes more clearly reflects income. See
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