-176-
thereunder, the court held that the Commissioner abused his
discretion in changing the taxpayer’s method of accounting
because that method complied with GAAP, was applied consistently
for both tax and financial accounting purposes, and produced
accurate results). Nor may the Commissioner change an accounting
method that clearly reflects income to a method that does not
clearly reflect income. See Harden v. Commissioner, 223 F.2d 418
(10th Cir. 1955), revg. and remanding 21 T.C. 781 (1954); Rotolo
v. Commissioner, 88 T.C. 1500, 1514 (1987); Brountas v.
Commissioner, 74 T.C. 1062, 1069 (1980), supplementing 73 T.C.
491 (1979), vacated and remanded on other grounds 692 F.2d 152
(1st Cir. 1982), affd. in part and revd. in part on other grounds
sub nom. CRC Corp. v. Commissioner, 693 F.2d 281 (3d Cir. 1982).
Respondent argues that the Court may find that the
Commissioner has abused his discretion under section 446(b) only
if the Court first finds that the taxpayer’s method of accounting
clearly reflects income. We disagree. We find nothing in either
the statute or the caselaw that preconditions a finding of an
abuse of discretion under section 446(b) on a finding that the
taxpayer’s method clearly reflects income.58 In fact, the
58 The caselaw does, however, establish the converse of
respondent’s proposition; i.e., the Commissioner lacks the
discretion to change a taxpayer’s method of accounting if the
taxpayer establishes that the method clearly reflects its income.
E.g., Peninsula Steel Prods. & Equip. Co. v. Commissioner,
78 T.C. 1029, 1044-1045 (1982); see also Capitol Fed. Sav. & Loan
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