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expenses that petitioner claimed during the examination was
approximately .519 percent of the total repair expenses that
petitioner reported on its returns for the years in issue.2
We do not accept petitioner’s argument that the adjustments
that respondent made or allowed during the examination were
tantamount to changing petitioner’s method of accounting. The
fact that an examination concludes with the adjustment of some
items does not in itself constitute a change in the method of
accounting. Indeed, when an examination results in relatively
minor adjustments and the Commissioner does not explicitly reject
the taxpayer’s method, there would appear to be an acceptance of
the taxpayer’s method. As we stated in our prior Opinion, “the
audit adjustments by respondent, do not change the fact that
petitioner is retroactively attempting to recharacterize
expenditures that it regularly and consistently capitalized for
2 In our prior Opinion, we stated:
In the instant case, respondent allowed petitioner
certain additional repair expense deductions related to
Florida Power. Respondent did not question
petitioner’s method of accounting or assert that any
impermissible change was being made. Rather,
respondent simply reviewed petitioner’s claim and
allowed an additional deduction based on the
circumstances. Petitioner has not alleged any action
on respondent’s part which could be construed as
approving the method of accounting petitioner is
currently claiming for the expenditures in issue.
* * * [FPL Group, Inc. & Subs. v. Commissioner, 115
T.C. 554, 573 (2000).]
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