- 37 -
recent case, this Court identified the following as the
policy reasons served by section 446(e):
(1) To protect against the loss of revenues;
(2) to prevent administrative burdens and
inconvenience in administering the tax laws;
and (3) to promote consistent accounting
practice thereby securing uniformity in
collection of the revenue.
FPL Group, Inc. & Subs. v. Commissioner, 115 T.C. at 574
(quoting Barber v. Commissioner, 64 T.C. 314, 319 (1975)).
Section 446(e) in Operation
By requiring the taxpayer to obtain the Commissioner’s
consent before changing his method of accounting, section
446(e) gives the Commissioner authority to approve or
disapprove such conforming changes prospectively. We have
held that a logical inference to be drawn from section
446(e) is that the Commissioner also has authority to
consent to a change in a taxpayer’s method of computing
taxable income that has already been made; i.e., to give
consent retroactively. See Barber v. Commissioner, 64 T.C.
314, 319 (1975).
Generally, in order to secure the Commissioner’s
consent to a change of a taxpayer’s method of accounting
before 1998, the taxpayer was required to file an
application with the Commissioner on a form provided for
Page: Previous 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 NextLast modified: May 25, 2011