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method that is subject to section 446(e), then the taxpayer
is foreclosed from making the change by section 446(e) and
the regulations promulgated thereunder without regard to
whether the new method would be proper. See So. Pac.
Transp. Co. v. Commissioner, supra at 682; Wright
Contracting Co. v. Commissioner, supra at 635-636. The
issue whether the change of accounting method is proper is
not pertinent until after the Commissioner has refused the
taxpayer’s request for consent to the change. See Brown
v. Helvering, supra at 203; Wright Contracting Co. v.
Commissioner, supra at 636; Advertisers Exchange, Inc.,
v. Commissioner, 25 T.C. at 1093.
Meaning of the Phrase “Method of Accounting”
The Code does not define the phrase “method of
accounting”. We have held that the phrase includes “the
consistent treatment of any recurring, material item,
whether that treatment be correct or incorrect.” See Bank
One Corp. v. Commissioner, 120 T.C. 174, 282 (2003); H.F.
Campbell Co. v. Commissioner, 53 T.C. 439, 447 (1969),
affd. 443 F.2d 965 (6th Cir. 1971).
The regulations promulgated under section 446 state:
“The term ‘method of accounting’ includes not only the
over-all method of accounting of the taxpayer but also the
accounting treatment of any item.” Sec. 1.446-1(a)(1),
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