-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, soilPage: Previous 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 Next
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