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designed to spread the costs of the expenditures over the 6-month
recovery period for the sole benefit of customers. By contrast,
the recovery methods in Southwestern Energy Co. and Continental
Ill. Corp. benefited only the taxpayer and not the customer.
Third, in a subsequent month, if an undercollection occurred in
Southwestern Energy Co., or if interest dipped below the
fixed-rate cap in Continental Ill. Corp., the taxpayer did not
immediately return overcollections from a prior month by setoff.
Thus, no refund occurred until the following year in Southwestern
Energy Co. or after the end of the loan period in Continental
Ill. Corp. In any event, no question was raised or considered
whether overrecoveries constituted gross income in the year of
receipt.
The final argument of respondent is that, by not including
overrecoveries in income, petitioner has improperly changed its
method of accounting with respect to a material item without the
consent of the Secretary. Consent is required by section 446(e),
which reads:
SEC. 446(e). Requirement Respecting Change of
Accounting Method.--Except as otherwise expressly
provided in this chapter, a taxpayer who changes the
method of accounting on the basis of which he regularly
computes his income in keeping his books shall, before
computing his taxable income under the new method,
secure the consent of the Secretary.
“[C]hange in method of accounting” includes a “change in the
overall plan of accounting for gross income or deductions or a
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