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mining expenses would be change in method of accounting, and not
mere correction of error, where taxpayer had knowingly and
consistently, albeit improperly, capitalized and amortized expenses
that should have been included in taxpayer’s cost of goods sold);
Handy Andy T.V. & Appliances, Inc. v. Commissioner, T.C. Memo.
1983-713 (specifically finding that an impermissible change in
accrual methodology was a change in method of accounting and that
reversion to original methodology was a second change in method of
accounting, warranting a section 481 adjustment). Indeed, in First
Natl. Bank of Gainesville v. Commissioner, 88 T.C. 1069 (1987), a
transferee liability case, the transferee argued that the
transferor’s alteration of a LIFO inventory valuation procedure
constituted the correction of an accounting error and not a change
in method of accounting. We held that, although the alteration in
question may have constituted the correction of an error, it also
constituted a change in method of accounting pursuant to section
472(e). Id. at 1085. We added: “Where the correction of an error
results in a change in accounting method, the requirements of
section 446(e) are applicable.” Id.
Our inconsistency in holding that a taxpayer does not change
its method of accounting when it does no more than conform to a
prior accounting election is not necessarily inconsistent with
section 1.446-1(e)(2)(ii)(a), Income Tax Regs. That is because,
generally, pursuant to section 1.446-1(e)(2)(ii)(a), Income Tax
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