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Inventory Shrinkage Estimates Are Not Prohibited by Treasury Regulation Section 1.471-2(d): Wal-Mart Stores v. Commissioner and Dayton Hudson v. Commissioner

In Wal-Mart Stores v. Commissioner, the Eighth Circuit upheld the Tax Court's holding that the Code did not prohibit the use of unverified inventory shrinkage in inventory accounting, if the method of accounting was sound. The court rejected in principle the Service's view that Regulation section 1.471-2(d) required verification by a physical count. ...

Sam Wales

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