Florida Progress Corporation and Subsidiaries - Page 27




                                       - 27 -                                         

          change in the treatment of any material item used in such overall           
          plan.”  Sec. 1.446-1(e)(2)(ii)(a), Income Tax Regs.  A material             
          item is defined as “any item which involves the proper time for             
          the inclusion of the item in income or the taking of a                      
          deduction.”  Sec. 1.446-1(e)(2)(ii)(a), Income Tax Regs.  When an           
          accounting practice does nothing more than postpone the reporting           
          of income, rather than permanently avoiding the reporting of                
          income over the taxpayer’s lifetime, it involves the proper time            
          for reporting income.  See Wayne Bolt & Nut Co. v. Commissioner,            
          93 T.C. 500, 510 (1989).  “[C]hange in method of accounting does            
          not include adjustment of any item of income or deduction which             
          does not involve the proper time for the inclusion of the item of           
          income or the taking of a deduction.”  Sec. 1.446-1(e)(2)(ii)(b),           
          Income Tax Regs.                                                            
               In Saline Sewer Co. v. Commissioner, T.C. Memo. 1992-236,              
          this Court held that, for purposes of section 446, a question of            
          whether collections should be reported in income is different               
          from a question as to the proper time when collections should be            
          reported in income.  If a taxpayer seeks to change his prior                
          reporting position regarding whether a particular item is income            
          or not, a taxpayer is not required to seek the Secretary’s                  
          permission before filing.  Thus, section 446(e) is inapplicable             
          to the reporting of overrecoveries by Florida Power during the              
          years in issue.                                                             





Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011