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accounting. Alternatively, petitioner alleges that respondent
abused his discretion in denying petitioner’s protective request
to change to that method of accounting.
We do not think that respondent’s inquiry during the
examination into whether petitioner may have misclassified some
expenditures as either capital or repair expenses constituted a
change of petitioner’s method of accounting by respondent.
Indeed, the relatively minor changes that the parties agreed to
as a result of this examination lead to the conclusion that
petitioner’s method of following the FERC/FPSC regulatory
accounting for determining repair expenses for tax purposes
produced results that were in reasonable conformity with the
legal standards set forth in section 1.162-4, Income Tax Regs.
On its returns for the years in issue, petitioner characterized
approximately $2.1 billion in expenditures related to Florida
Power’s electric plants as repair expenses for tax purposes. FPL
Group, Inc. & Subs. v. Commissioner, supra at 558. Respondent’s
examination for the years in issue resulted in capitalizing
approximately $1.2 million that had been previously deducted as
repair expenses. Respondent’s proposed adjustment, which
petitioner agreed to, represents a change of approximately .0571
percent of the total repair expenses petitioner claimed on its
returns using the FERC/FPSC method of accounting. Likewise,
respondent’s allowance of an additional $10.9 million of repair
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