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previously discussed, we do not think that the FERC/FPSC method
is contrary to the regulation. Regardless of whether a taxpayer
used a proper or improper method of accounting, a taxpayer must
receive the Commissioner’s approval before changing a method of
accounting. Sec. 446(e); sec. 1.446-1(e)(2)(I), Income Tax
Regs.4 The Commissioner has wide discretion to decide whether to
consent to a taxpayer request to change a method of accounting.
Sunoco, Inc. & Subs. v. Commissioner, T.C. Memo. 2004-29. Here,
petitioner sought a retroactive change to its method of
accounting. The Commissioner generally will not grant
retroactive changes to a taxpayer’s method of accounting. See
sec. 1.446-1(e)(3)(I), Income Tax Regs.; Rev. Rul. 90-38, 1990-1
C.B. 57; Rev. Proc. 97-27, sec. 2.04, 1997-1 C.B. 680, 682. As a
result, we do not think respondent abused his discretion by
denying petitioner’s protective request for a change in method of
accounting.
Finally, petitioner alleges that respondent has allowed
unspecified competitors to claim additional repair expenses under
section 1.162-4, Income Tax Regs., even though they also followed
4 The reason for requiring the Commissioner’s consent was
stated in Lord v. United States, 296 F.2d 333, 335 (9th Cir.
1961), as follows: “If * * * [taxpayers] were allowed to report
income in one manner and then freely change to some other manner,
the resulting confusion would be exactly that which was to be
alleviated by requiring permission to change accounting methods.”
See also FPL Group, Inc. & Subs. v. Commissioner, 115 T.C. at
573-575.
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