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disparities, the majority did not address the question of
substantial identity of results. See majority op. p. 37.
Petitioner’s failure to show that any of the above-discussed
factors or items would not have made a difference in petitioner’s
cost of goods sold or income, ultimately, should result in our
holding that petitioner failed to show that respondent abused his
discretion in determining that petitioner’s use of the cash
method did not clearly reflect income. In the vernacular used by
the majority, petitioner has not shown that respondent’s
determination was “plainly arbitrary”.3 Majority op. p. 14. We
next consider whether petitioner has shown that respondent’s
determination was “clearly unlawful”. Id.
Legal Discussion
The majority’s legal discussion is broken into two major
categories involving whether the sidewalks, driveways, and
foundations were merchandise and whether respondent abused his
discretion. Each is separately addressed.
(1) Whether the Materials Used or the Structures Constructed
by Petitioner Were Merchandise
Normally, in cases where respondent determines that a
taxpayer’s accounting method should be changed to the accrual
method, the controversy concerns whether the merchandise is a
material income-producing factor and whether the accrual or cash
3 Even if the facts equally supported both parties’
positions, petitioner necessarily fails to meet the heavy burden
imposed.
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