- 18 - the Commissioner had not consented to the change. See id. at 680. We held that, regardless of whether the expenditures were more properly deductible as business expenses under section 162, allowing the taxpayer to deduct such expenditures would result in an impermissible change in method of accounting. See id. at 687. We found it readily apparent that the taxpayer was seeking to alter the manner in which it had consistently accounted for a recurring, material item. See id. at 686. We explained that a change in the treatment of the expenditures involved a question of proper timing; thus, the change in treatment would affect a material item. See id. at 683. The taxpayer consistently followed the ICC accounting rules in capitalizing certain expenditures for tax reporting purposes, and its later attempt to recharacterize those expenditures as repair expenses was prohibited, absent consent by the Commissioner. In Wayne Bolt & Nut Co. v. Commissioner, 93 T.C. 500 (1989), the taxpayer, for a number of years, determined its ending inventory by selecting a small portion of its inventory cards and using them to approximate the ending inventory. See id. at 503. Later, the taxpayer completed a physical inventory in which it identified and catalogued all inventory. See id. at 504. Based on this thorough examination of inventory, the taxpayer attempted to adjust its opening inventory to reflect the actual amount identified. See id. at 504-505. This amount was considerablyPage: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Next
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