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Commissioner has broad powers to determine whether an accounting
method used by a taxpayer clearly reflects income. See
Commissioner v. Hansen, 360 U.S. 446, 467 (1959); Ansley-
Sheppard-Burgess Co. v. Commissioner, 104 T.C. 367, 370 (1995).
Courts do not interfere with the Commissioner’s determination
under section 446 unless it is clearly unlawful. See Thor Power
Tool Co. v. Commissioner, 439 U.S. 522, 532 (1979); Cole v.
Commissioner, 586 F.2d 747, 749 (9th Cir. 1978), affg. 64 T.C.
1091 (1975); Ansley-Sheppard-Burgess Co. v. Commissioner, supra
at 370.
Whether respondent abused his discretion is a question of
fact. See Ansley-Sheppard-Burgess Co. v. Commissioner, supra at
371; Ford Motor Co. v. Commissioner, 102 T.C. 87, 91-92 (1994),
affd. 71 F.3d 209 (6th Cir. 1995). The reviewing court’s task
is not to determine whether, in its own opinion, the taxpayer’s
method of accounting clearly reflects income but to determine
whether there is an adequate basis in law for the Commissioner’s
conclusion that it does not. See Ansley-Sheppard-Burgess Co. v.
7(...continued)
(1) the cash receipts and disbursements method;
(2) an accrual method;
(3) any other method permitted by this chapter; or
(4) any combination of the foregoing methods
permitted under regulations prescribed by the
Secretary.
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