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eliminate the double deduction of the $14,000. We conclude that
respondent's section 481 adjustment did not violate section 6501.
Petitioner also suggests that the $14,000 franchise tax
deduction in question did not, for petitioner, constitute a
"material item" and therefore that the section 481 adjustment
should not be allowed.
Sections 1.446-1(e)(2)(ii)(a) and 1.481-1(a)(1), Income Tax
Regs., provide generally that a change in method of accounting
includes, among other things, a change in the treatment of a
material item. Petitioner herein has failed to prove that the
duplication of the $14,000 franchise tax deduction for 1993 was
not material. A mere assertion in a brief that the parties did
not stipulate as to the materiality of an item is not sufficient
to establish the nonmateriality thereof.
We hold that section 6501 does not bar respondent from
making the section 481 adjustment involved herein.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011