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contract to sell the materials but rather contracted to provide
finished walkways, repaired streets, and the like. Third, the
construction projects that petitioner engaged in were
improvements to real property. Fourth, petitioner did not leave
any of the materials on the construction site, or store them for
use for a later project. See id. at 228-231. Given our recent
holding in RACMP Enters., Inc., and the indistinguishable facts
of the instant case, we hold that petitioner was not engaged in
the production or sale of merchandise. Therefore, petitioner
cannot be required to use inventories, and the Commissioner
abused his discretion in requiring petitioner to change from the
cash method of accounting.
To reflect the foregoing,
Decision will be entered
for petitioner.
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Last modified: May 25, 2011