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larger than the amount determined under the approximation method
previously used by the taxpayer. See id. at 512. We held that
the taxpayer’s “change from a seriously flawed and disorganized
method * * * to a method of determining both opening and ending
inventory * * * on the basis of a complete physical inventory
[was] a change in the treatment of a material item and,
therefore, [constituted] a change in accounting method.” Id. at
510. We found that the approximation method of determining
inventory, while disorganized and inaccurate, was consistently
used by the taxpayer despite his actual knowledge that the
inventory amounts were not completely accurate. See id. at 512.
This consistent practice constituted a method of accounting for
determining inventory. See id.
Petitioner argues that Wayne Bolt & Nut Co. v. Commissioner,
supra, does not apply because it involved inventories and they
are governed by separate and distinct rules for purposes of
determining a method of accounting. We disagree. While there
are specific regulations which address the accounting treatment
of inventories, the basic principles apply for purposes of
determining a method of accounting; namely, that a consistent
method used to determine the tax treatment of a material item is
a method of accounting. Our holding and reasoning in Wayne Bolt
& Nut Co. v. Commissioner, supra, is applicable to the instant
case.
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