Bank One Corporation - Page 90

                                        -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              





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

Last modified: May 25, 2011