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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