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the Government, and is therefore an abuse of discretion.” We
disagree. The change for the subject year was neither
unreasonable nor an abuse of discretion; adjustments to prevent
amounts from being duplicated or omitted were specifically
required to be made in the first year in which Diehl’s method of
accounting was changed to an accrual method.6 See sec.
481(a)(1); sec. 1.481-1(a)(1), Income Tax Regs.; see also Suzy’s
Zoo v. Commissioner, 114 T.C. 1, 12-13 (2000).
Petitioner has failed to demonstrate that the Commissioner’s
determination was clearly unlawful or plainly arbitrary.
Accordingly, we hold that respondent did not abuse his discretion
under section 446 when he determined that Diehl had to change
from its hybrid method to an accrual method. All arguments for a
contrary holding have been considered and have been rejected as
meritless to the extent not discussed.
Decision will be entered
for respondent.
6 Petitioner also notes that the Commissioner had previously
examined some of Diehl’s earlier returns and had not changed
Diehl’s use of the cash method on those returns. Petitioner
suggests that the Commissioner is estopped from making the sec.
481 adjustment for the subject year. We find this suggestion
unavailing. The fact that the Commissioner had the opportunity
to, but did not, change an improper method of accounting in an
earlier year does not mean that he is estopped from making the
change in the later year. See Knight-Ridder Newspapers Inc. v.
United States, 743 F.2d 781 (11th Cir. 1984).
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