Sunoco, Inc. and Subsidiaries - Page 45

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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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