-172-
administrative costs adjustments. We disagree. Petitioner
either controls or has controlled all of the documents necessary
to support its claim to the credit and administrative costs
adjustments. Whereas petitioner has chosen not to introduce
those documents into evidence, it is not now incumbent on
respondent to do so. As the Court of Appeals for the Seventh
Circuit stated in Pfluger v. Commissioner, 840 F.2d 1379, 1383
(7th Cir. 1988), affg. T.C. Memo. 1986-78, while rejecting a
similar argument:
They [the taxpayers] willfully refused to cooperate
with the audit. They cannot thereby force the
Commissioner to resort to “averages” to estimate the
deductions that they could have taken. If that were
the case, nobody would cooperate with an audit. The
use of estimates could often result in allowance of
more deductions than the taxpayer was actually entitled
to take; if it did not, the taxpayer would simply
petition for a redetermination and substantiate greater
deductions. * * *
IV. Tax Accounting for Methods of Accounting
Section 446(a) contains the general rule for tax accounting.
Section 446(a) generally requires that the accounting method used
by a taxpayer to compute its taxable income be based on the
method of accounting used by the taxpayer to compute its book
income. The regulations interpreting section 446(a) restate this
requirement and clarify that the requirement must be met unless
the Internal Revenue Code provides a more specific accounting
method for an item. Sec. 1.446-1(a), Income Tax Regs. The
regulations list “research and experimental expenditures, soil
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