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Moreover, the plaintiff in this case desires to
make precisely the kind of change that could undermine
the purposes of the prior consent rule. The plaintiff
seeks to apply a unilateral change retroactively to
cover many past tax years. If taxpayers were permitted
to select the accounting method which best reflects
their income over the past four years, only those
taxpayers gaining a financial advantage from switching
methods would seek refunds. Thus, uniformity in
accounting would become a function of financial
advantage and the administrative difficulties of
detecting unwarranted unilateral changes would be
multiplied. Moreover, the potential impact on the fisc
would be likely to vary unpredictably from year to
year. In sum, the purposes and policies underlying the
consent requirement are still served when a taxpayer
presumes to change unilaterally from an incorrect to a
correct procedure.
Acceptance of petitioner’s position would grant petitioner
the license to change freely from one characterization to another
when hindsight shows that it is financially advantageous.
Petitioner waited until 1996 to attempt to recharacterize as
repair expenses, expenditures that it had characterized for tax
purposes as capital expenditures for the years 1988 to 1992. It
would place an enormous burden upon respondent to detect and
review the ramifications of such a change. For example,
petitioner’s attempt to recharacterize more than $200 million of
expenditures incurred from 1988 to 1992 as deductible repair
expenses would require adjustments to petitioner’s capital asset
accounts for those years and subsequent years. Adjustments to
depreciation deductions taken in the years in issue and
subsequent years would be necessary. The administrative burden
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