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certain conditions being satisfied and a proper election to adopt
and use the method being made. See sec. 472(a), (c); 1.472-3,
Income Tax Regs. (“Time and manner of making election.”).
Huffman Group Elections
The parties have stipulated that, prior to the tax years at
issue, each member of the Huffman group filed an election to use
the link-chain, dollar-value LIFO inventory method (the link-chain
method).10 The parties have further stipulated that those elections
were effective for the members as of the close of their taxable
years ending as follows: Nissan, June 30, 1979; Volkswagen, Dec.
31, 1979; Dodge and Chrysler, Dec. 31, 1989.
The Accountant’s Method
The Huffman group employed an accountant (the accountant) to
compute the values of the respective inventories of each member
using the link-chain method. The accountant was consistent in his
method (the accountant’s method) of making those computations each
year, for each member, beginning with the year of each member for
10 The parties have attached documentation to the
stipulation of facts evidencing those elections. The
documentation is inconsistent with the described elections with
respect to (1) Neil Huffman Enterprises, Inc., d.b.a. Neil
Huffman Dodge, and (2) Neil Huffman, Inc., d.b.a. Huffman
Chrysler Plymouth, in that it indicates that those corporations
elected to adopt “an index method as provided in [sec. 1.472-
8(e)(1), Income Tax Regs., * * * which] will be developed by
double extending * * * a representative portion of inventory at
beginning of year cost and current cost.” Such an index method
is distinct from the link-chain method purportedly adopted. We
address the significance of that fact infra in sec. III.C.3.b.iii
of this report.
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