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materials were delivered to the developer's site, any amount
kept on hand at the equipment yard had to be insignificant.
Petitioner's possession of a de minimis amount of material
would not be sufficient to require it to use the accrual method
of accounting for inventories. See Osteopathic Med. Oncology &
Hematology, P.C. v. Commissioner, supra at 113 T.C. at 387
(taxpayer that had 2 weeks' supply of chemotherapy drugs on hand
not required to use inventory method of accounting); Honeywell,
Inc. v. Commissioner, supra (taxpayer not required to use
inventory method of accounting for computer replacement parts
that were stored on taxpayer's premises and represented 11 and 12
percent of income, even though taxpayer transferred title to the
replacement parts to the customer); see also Tech. Adv. Mem. 98-
48-001 (July 16, 1998) (taxpayer that purchases and sells
merchandise not required to maintain inventories because the
purchase and sale of the merchandise was de minimis and not an
income-producing factor within the meaning of section 1.471,
Income Tax Regs.; therefore, taxpayer may continue to account for
these merchandise items on the cash basis); G.C.M. 38,288 (Feb.
21, 1980) (the IRS may allow the use of the cash method of
accounting despite the fact that the taxpayer may furnish some
tangible product in the course of rendering a service, a
reconsideration of Rev. Rul. 74-279, 1974-1 C.B. 110).
We decline to attach significance to the fact that in calculating
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