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permission. For examples of situations where certain
modifications in the accrual of items under the all-events test
were held to constitute not “changes” in methods of accounting
for such items but mere “corrections” in the application to such
items of the all-events test of the accrual method of accounting
(for which corrections respondent’s permission was not required)
see Northern States Power Co. v. United States, 151 F.3d 876,
883-885 (8th Cir. 1998); Gimbel Bros., Inc. v. United States, 210
Ct. Cl. 17, 535 F.2d 14, 21-23 (1976); Standard Oil Co. v.
Commissioner, 77 T.C. 349, 381-383 (1981).
In Ohio River Collieries Co. v. Commissioner, 77 T.C. 1369
(1981), we recognized that under the all-events test accrual of
estimated strip-mining reclamation costs as ordinary and
necessary business expenses may be appropriate in the year the
land is disturbed, rather than in the year the reclamation work
is performed. Arguably, in light of that case, Exxon’s attempted
modification to the accrual of estimated DRR costs from the year
DRR work is performed to the year in which wells are drilled
would qualify as a mere correction in Exxon’s method of
accounting for such well-site DRR costs for which respondent’s
permission would not be required. In light, however, of our
resolution of the next issue we need not, and we do not, decide
this issue.
Distortion of Income
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