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years. Verified by the normal five year contract the
garments * * * [are] priced so that the expense of
obtaining the rental is recovered with a five year
rental program.
Dust control items, consisting of mats and mops, have
also been shown to have a life of five years. * * *
OPINION
Although not explicitly stated in the notice of deficiency,
the deficiency amounts reflect adjustments that would require
petitioner to capitalize the cost of the garments and dust
control items that it used in its industrial laundry business and
to depreciate the cost of the items over the useful lives that
were determined by respondent.
The issue presented is whether it was an abuse of
respondent’s discretion, under section 446(b), to require
petitioner to change its method of accounting.
The term “methods of accounting” includes not only the
overall method of accounting of the taxpayer but also the
accounting treatment of any item. Sec. 1.446-1(a)(1), Income Tax
Regs. A correction to require depreciation in lieu of a
deduction for the cost of a class of depreciable assets that had
been consistently treated as an expense involves the question of
the proper timing of an item and is to be treated as a change in
method of accounting. Sec. 1.446-1(e)(2)(ii)(b), Income Tax
Regs. Thus, respondent’s determination that petitioner must
capitalize the cost of the garments and dust control items
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