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allowed the use of an accounting method that was challenged by
the Commissioner when the taxpayer’s method clearly reflected
income and the Commissioner’s method did not. See Rotolo v.
Commissioner, 88 T.C. 1500, 1514 (1987).
When a taxpayer challenges the Commissioner’s authority
under section 446(b), we inquire whether the accounting method in
issue clearly reflects income. The answer to this question does
not rest on whether the taxpayer’s method is superior to the
Commissioner’s method, or vice versa. RLC Indus. Co. & Subs. v.
Commissioner, 98 T.C. 457, 492 (1992), affd. 58 F.3d 413 (9th
Cir. 1995); Wal-Mart Stores, Inc. & Subs. v. Commissioner, T.C.
Memo. 1997-1, affd. 153 F.3d 650 (8th Cir. 1998); see also Brown
v. Helvering, 291 U.S. 193, 204-205 (1934). Nor does the answer
rest solely on whether a consistently applied method of
accounting is listed in section 446(c) as a “permissible method”.
Sec. 446(b) (Commissioner may change any “method used [that] does
not clearly reflect income”) and (c) (“Subject to the provisions
of subsections (a) and (b), a taxpayer may compute taxable income
under any of the following methods of accounting” (emphasis
added)); see also sec. 1.446-1(a)(2), Income Tax Regs. Instead,
the answer must be found by analyzing the facts and circumstances
of the case. Ansley-Sheppard-Burgess Co. v. Commissioner, supra;
Peninsula Steel Prods. & Equip. Co. v. Commissioner, 78 T.C.
1029, 1045 (1982).
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