Dow A. and Sandra E. Huffman, et al. - Page 1

                                   126 T.C. No. 17                                    

                               UNITED STATES TAX COURT                                

                DOW A. AND SANDRA E. HUFFMAN, ET AL.,1 Petitioners v.                 
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket Nos. 2845-04, 2846-04,    Filed May 16, 2006.                   
                           2847-04, 2848-04.                                          
                    The sole issue for decision is whether a                          
               correction to the inventory method employed by S                       
               corporations owned by certain of the petitioners                       
               constitutes an accounting method change that requires                  
               an adjustment pursuant to sec. 481, I.R.C.  For periods                
               ranging from 10 to 20 years, the corporations’                         
               accountant, in applying the link-chain, dollar-value                   
               method of valuing LIFO inventory, omitted a step                       
               required by that method.                                               
                    Held:  R’s revaluations of the corporations’                      
               inventories, to correct for the accountant’s omissions,                
               constituted changes in a method of accounting employed by              
               the corporations, requiring adjustments pursuant to sec.               
               481, I.R.C., to prevent amounts of income from being omitted           
               solely on account of the changes.                                      

               1  Cases of the following petitioners are consolidated                 
          herewith:  James A. and Dorothy A. Patterson, docket No. 2846-04;           
          Douglas M. and Kimberlee H. Wolford, docket No. 2847-04; and Neil           
          A. and Ethel M. Huffman, docket No. 2848-04.                                

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