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treated all of Cordero’s overburden removal costs as
production costs on its federal income tax returns, except
for the amount capitalized due to the mischaracterization.”
(Emphasis supplied.)
Petitioner argues that it is not attempting to change
its method of accounting for production costs or its method
of accounting for mine development costs, nor is it
attempting to change the treatment of a material item.
According to petitioner, adjusting a deduction, as it
proposes to do in this case, does not involve a change in
method of accounting, such that the taxpayer is required
by section 446(e) to obtain the consent of the Secretary,
because the change does not “[involve] the proper time
for the * * * taking of a deduction.” See sec. 1.446-
1(e)(2)(ii), Income Tax Regs. Petitioner argues that
correcting its mischaracterization of overburden removal
expenses in this case, where petitioner has no choice in
how to report the item for tax purposes, “involves a matter
of characterization not a matter of timing as defined in
the regulations.” Thus, petitioner argues, the change in
this case does not involve a change in method of account-
ing. Petitioner asserts that there is a difference between
characterizing an item for tax purposes and accounting for
it. Petitioner argues that it “should be permitted to
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