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mistakes were not an unauthorized change of accounting method,
but more “akin to posting errors”. Id. at 885. Similarly, in
Korn Indus., the court held that where a taxpayer inadvertently
forgot to include several categories of costs in calculating its
finished goods inventory, the subsequent inclusion was not an
accounting method change. As the court explained, the taxpayer
“did not change to any different method.” Id. at 1355.
Our reasoning in Wayne Bolt & Nut Co. v. Commissioner,
supra, is more illustrative of Color Arts’s situation. For
numerous years before 1982, the taxpayer calculated its opening
and ending inventory using a “seriously flawed” perpetual
inventory record-keeping system. Id. at 508. Historically, the
taxpayer verified inventory by taking a partial physical
inventory. In 1982, the taxpayer performed a complete physical
inventory which indicated that opening inventory for fiscal 1982
was 10 times greater than ending inventory reflected on the books
and as originally reported for the end of the prior fiscal year.
For its 1982 fiscal year, the taxpayer reconstructed its opening
and ending inventory on the basis of the results of the complete
inventory. We held that “Since * * * [the taxpayer’s] pre-1982
method of determining inventory involved the proper time for
reporting income, it was a ‘material item’” and that the
taxpayer’s “change from a seriously flawed and disorganized
method of determining inventory to a method of determining both
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