Court Opinion

ID: 9448788
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:44:45.577128+00
Date Added: 2024-06-11T17:31:33.053509
License: Public Domain

*266LEWIS, Circuit Judge
(dissenting).
As a matter of daily routine thousands of revenue agents with varying degrees of skill, knowledge and experience conduct audits of taxpayers’ books. I am unconvinced that Congress intended that the uncontrolled and unrecorded comments of these agents should trigger the impact of Sec. 481 of the Internal Revenue Code of 1954. Admittedly, examining agents have no authority to require a taxpayer to change a method of accounting. To hold, as do the majority, that the comments of these agents can create a binding tax basis is but to invite constant dispute and to create the potential of much mischief.
As I read the main opinion it interprets Sec. 481 as meaning that a change of accounting is “initiated” by an idea. In the ease at bar the idea was that of the examining agent. But the first act was that of the taxpayer and to me, and under the definition of initiate approved in the main opinion (see footnote 8), the first act is the guiding incident.
I find no ambiguity in the statute itself. If any ambiguity exists it lies in the Congressional reports. Both have been interpreted sensibly and correctly by Treas.Reg. § 1.481-1 (c). See footnote 7.
I would reverse.