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deducted as business expenses, but which are in
fact personal expenses, are not changes in method
of accounting. * * * A change in the method of
accounting also does not include a change in
treatment resulting from a change in underlying
facts. On the other hand, for example, a
correction to require depreciation in lieu of a
deduction for the cost of a class of depreciable
assets which had been consistently treated as an
expense in the year of purchase involves the
question of the proper timing of an item, and
is to be treated as a change in method of
accounting.
The Change That Petitioner Seeks To Make in This Case
Involves a Material Item
In the present case, petitioner is not seeking to
change its overall plan of accounting for gross income or
deductions, such as by changing from the accrual method
to some other overall method of accounting. Rather, the
change that petitioner seeks to make involves the treatment
of a single item, the overburden removal costs incurred by
Cordero at the Gillette mine, which forms a part of
petitioner’s overall plan. We must determine whether this
is a material item; that is, an “item which involves the
proper time for the inclusion of the item in income or the
taking of a deduction.” See sec. 1.446-1(e)(2)(ii)(a),
Income Tax Regs. If it is a material item, then a change
in its treatment can involve a change in petitioner’s
method of accounting, and we must consider petitioner’s
other arguments.
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