- 33 -
In Barber v. Commissioner, 64 T.C. 314 (1975), we identified the
following policy reasons served by section 446(e): “(1) To
protect against the loss of revenues; (2) to prevent
administrative burdens and inconvenience in administering the tax
laws; and (3) to promote consistent accounting practice thereby
securing uniformity in collection of the revenue.” Id. at 319-
320 (citations omitted). A comprehensive discussion and analysis
of the policy rationale of section 446(e) is found in Diebold,
Inc. v. United States, 16 Cl. Ct. 193, 208-209 (1989):
a central policy underlying the consent requirement is
that the Commissioner should have an opportunity to
review consent requests in advance. With advance
notice, the Commissioner has leverage to protect the
fisc, to avoid burdensome administrative uncertainties,
and to promote accounting uniformity. If taxpayers
generally were permitted to change accounting methods
unilaterally, the Commissioner would face the enormous
administrative burden of detecting changes and
reviewing the propriety of each switch without ready
leverage to protect the fisc or promote uniformity.
In the absence of * * * [section 446(e)], a
taxpayer could adopt a method of accounting and after
several years unilaterally switch to an alternative
method which hindsight suggests would have been more
financially beneficial. Thus, the Commissioner’s
ability to protect the fisc and prevent unnecessary
variations in accounting procedures would be
substantially reduced. In order to avoid missing
taxable income, the IRS would be required to multiply
its detection and examination efforts to prevent abuse
of unconsented retroactive changes. The administrative
advantages of advance notice are thus integrally linked
to the purposes of protecting the fisc and promoting
accounting uniformity.
11(...continued)
and Lord v. United States, supra).
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