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paying it.” Id. at 1350-1351. Although that issue was not
decided on the basis of clear reflection of income, the taxpayer
was required to allocate a fixed cost incurred for multiple
purposes to a single, capital expenditure purpose.
C. Criticism of Majority
My criticism of the majority is not, per se, with its
finding that there were no incremental overhead costs
attributable to capital expenditures (although I doubt that that
is true). My criticism is with the majority’s uncritical
acceptance of the taxpayer’s method of accounting for overhead.
Judge Tannenwald’s nuanced analysis in Fort Howard Paper Co. v.
Commissioner, supra, exemplifies the considerations traditionally
given to clear reflection of income cases. Consider also Judge
Dawson’s’ analysis in Coors v. Commissioner, supra. The Supreme
Court cases that figure so prominently in the majority’s
analysis, see majority op. p. 18, are inapposite. Simply, they
do not address the accounting question here before us: Namely,
does it clearly reflect ACC’s income for Federal income tax
purposes for ACC to use a method of accounting that allocates
zero overhead to a costing unit (ACC’s credit analysis
activities) to which such overhead concededly relates? If ACC’s
accounting method is rejected, and some or all of the overhead is
allocated to ACC’s credit analysis activities, then, I suppose,
such overhead would, in the majority’s terminology, be directly
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