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The Consent Requirement
Section 446(e), the provision at issue in this case,
provides as follows:
SEC. 446(e). Requirement Respecting Change
of Accounting Method.--Except as otherwise
expressly provided in this chapter, a taxpayer
who changes the method of accounting on the basis
of which he regularly computes his income in
keeping his books shall, before computing his
taxable income under the new method, secure the
consent of the Secretary.
The purpose of the consent requirement imposed by
section 446(e) is to require consistency in the method of
accounting used for tax purposes and, thus, to prevent
distortions of income, which usually accompany a change of
accounting methods and which could have an adverse effect
upon the revenue. See Commissioner v. O. Liquidating
Corp., 292 F.2d 225, 231 (3d Cir. 1961), revg. T.C. Memo.
1960-29; Wright Contracting Co. v. Commissioner, 36 T.C.
620, 634 (1961), affd. 316 F.2d 249 (5th Cir. 1963); Casey
v. Commissioner, 38 T.C. 357, 386-387 (1962); Advertisers
Exchange, Inc. v. Commissioner, 25 T.C. 1086, 1092-1093
(1956), affd. per curiam 240 F.2d 958 (2d Cir. 1957). In
part, the consent requirement is also intended to lessen
the Commissioner’s burden of administering the Internal
Revenue Code. See Lord v. United States, 296 F.2d 333, 335
(9th Cir. 1962); Casey v. Commissioner, supra at 386. In a
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