- 4 - expenses on petitioner’s returns for the years in issue was required to be capitalized. Petitioner also relies on the fact that, during the examination, it filed a claim for approximately $21 million in additional repair expenses for the year 1992 of which respondent’s agents allowed approximately $10.9 million as additional repair expenses. Respondent has never notified petitioner that he was changing petitioner’s method of accounting, and respondent denies that any of the aforementioned actions taken during the examination had that effect. Indeed, in petitioner’s memorandum in opposition to respondent’s previous motion for partial summary judgment, which we granted, petitioner stated: When seeking to capitalize repair expenses deducted by Petitioner, at no time did Respondent assert that he was changing Petitioner’s method of accounting or that he had determined that Petitioner’s method did not clearly reflect income as required under Section 446 of the Code in order to require such a change. * * * In its reply brief to respondent’s previous motion, petitioner also stated: “At no time did Respondent’s agents propose a ‘change in method of accounting’ when proposing to disallow repair expense for tax purposes”. In its memorandum in opposition to respondent’s previous motion for partial summary judgment, petitioner claimed that it was using the “method of accounting” required by section 1.162-4, Income Tax Regs., and that the amounts classified as repair expenses for FERC/FPSC regulatory and financial reportingPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
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