- 41 -
213; So. Pac. Transp. Co. v. Commissioner, 75 T.C. at 681.
“The applicable standard is whether the accounting clearly
reflects income”. United States v. Ekberg, supra at 925
(opinion by Circuit Judge Blackmun). The taxpayer must
show that the Commissioner acted arbitrarily upon any fair
view of the facts. See Schram v. United States, supra at
543-544.
On the other hand, in a case in which the taxpayer
did not first request the Commissioner’s consent, such as
where, as in the instant case, the taxpayer attempts in a
court proceeding to retroactively alter the manner in which
the taxpayer accounted for an item on his or her tax
return, then there is no action of the Commissioner to
review under the abuse of discretion standard. The
question in such a case is whether the change constitutes
a change of accounting method that is subject to section
446(e) and not whether the Commissioner’s actions were
arbitrary and an abuse of discretion. See So. Pac. Transp.
Co. v. Commissioner, supra at 682; Wright Contracting Co.
v. Commissioner, 36 T.C. at 635-636; cf. FPL Group, Inc. &
Subs. v. Commissioner, 115 T.C. at 572, 575; Poorbaugh v.
United States, 423 F.2d 157, 163 (3d Cir. 1970); Hackensack
Water Co. v. United States, 173 Ct. Cl. 606, 352 F.2d 807
(1965). If the change constitutes a change of accounting
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