- 2 -
1996 719,096
Docket No. 8875-00
Year Deficiency
1997 $665,458
1998 1,036,011
After concessions by the parties, the issue remaining for
decision is whether it was an abuse of discretion, under section
446(b), to require petitioner to capitalize and depreciate the
cost of the garments and dust control items used in petitioner’s
industrial laundry business.
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
FINDINGS OF FACT
Some of the facts have been stipulated, and the stipulated
facts are incorporated in our findings by this reference. Unless
otherwise indicated, the facts and events contained herein
occurred during the years in issue.
Petitioner is a California corporation with its principal
place of business in Irvine, California. Petitioner is in the
industrial laundry business, which provides, launders, repairs
and maintains, and services garments worn by the employees of
petitioner’s customers. Petitioner offers industrial garments
and dust control items at about 20 locations in four States and
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