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that it was using an “approximation” method and expected to make
later corrections. Petitioner’s own statements establish that it
did not “mistakenly” capitalize the expenditures in issue based
on a lack of knowledge of an error. Accordingly, we hold that
petitioner’s attempted recharacterization of the expenditures in
issue was not a posting error. Cf. Wayne Bolt & Nut Co. v.
Commissioner, supra at 512.
III. Consent
Petitioner implies that respondent waived the right to
contest petitioner’s recharacterization of capital expenditures
as repair expenses.9 Petitioner points to the fact that
respondent allowed petitioner to reclassify approximately $11
million in capitalized expenditures related to Florida Power as
repair expenses for the 1992 taxable year. Prior to this motion,
respondent did not raise the change in accounting method
argument.
Consent to change a method of accounting is required,
regardless of whether the “method is proper or is permitted under
the Internal Revenue Code or the regulations thereunder.” Sec.
1.446-1(e)(2)(i), Income Tax Regs. In Southern Pac. Transp. Co.
v. Commissioner, 75 T.C. at 682, we stated:
9Petitioner claims that it “is not trying to work an
‘estoppel’”, but rather that it is simply trying to show that
respondent never treated the similarities between regulatory,
financial, and tax classifications of capital expenditures and
repair expenses as a method of accounting.
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