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OPINION
Section 481(a) requires that, if changes in methods of
accounting occur, certain other adjustments to taxable income be
made. The purpose of adjustments under section 481 is "to
prevent amounts from being duplicated or omitted" as a result of
changes in methods of accounting. Sec. 481(a)(2).
Section 6501(a) provides generally that the amount of any
tax imposed by the Code is to be assessed within 3 years after
the filing of a tax return.
Petitioner contends that respondent's $14,000 section 481
adjustment against petitioner for 1993 should not be allowed
because it in effect reopens petitioner's 1992 closed Federal
income tax return, violating the period of limitations applicable
to petitioner's 1992 corporate Federal income tax liability.
The courts consistently hold that section 481 adjustments
may be made in spite of the fact that the related years in which
the duplicate deductions were taken have been closed by the
applicable period of limitations. See, e.g., Peoples Bank &
Trust Co. v. Commissioner, 415 F.2d 1341, 1344 (7th Cir. 1969),
affg. 50 T.C. 750 (1968); Graff Chevrolet Co. v. Campbell, 343
F.2d 568, 572 (5th Cir. 1965); Superior Coach, Inc. v.
Commissioner, 80 T.C. 895, 912 (1983); German v. Commissioner,
T.C. Memo. 1993-59, affd. without published opinion 46 F.3d 1141
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Last modified: May 25, 2011