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to deduct certain costs that was involved in Standard Oil
Co. (Indiana). First, this case does not involve “internal
inconsistencies.” Petitioner treated all of the overburden
removal expenses incurred at the Gillette mine as
development expenses for tax purposes. The parties
stipulated: “Cordero incorrectly classified its costs of
overburden removal at its Gillette mine as mine development
expenses.” Petitioner now wants to reclassify all of those
costs as production costs. Furthermore, we cannot find
that the change in treatment sought by petitioner was
necessitated by the discovery of an error, as opposed to
“a discretionary choice”. All of the overburden removal
expenses incurred at the Gillette mine were treated as
production costs for book purposes, and the Schedule M-1,
Reconciliation of Income Per Books With Income Per Return,
filed with petitioner’s return for each of the years in
issue, reconciles that book treatment with the tax
treatment of the same overburden removal expenses as
development expenditures.
In summary, the instant case does not involve the kind
of recharacterization that was involved in either Underhill
v. Commissioner, 45 T.C. 489 (1966), or Coulter Elecs.,
Inc. v. Commissioner, T.C. Memo. 1990-186, and that takes
into account the nontaxable character of payments that are
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