Rockwell International Corporation v. Commissioner of Internal Revenue

OPINION OF THE COURT

Before SEITZ, Chief Judge, ROSENN and GARTH, Circuit Judges. PER CURIAM.

I

Rockwell International Corp. (taxpayer) appeals from the Tax Court’s denial of its petition to redetermine a tax deficiency and argues that it was an abuse of discretion for the Commissioner of Internal Revenue to disallow a $16,250,000 writedown in inventory held under a fixed-price contract. Taxpayer computed this writedown pursuant to its method of inventory accounting, which it claims is acceptable under I.R.C. §§ 446 and 471.

Sections 446 and 471 vest the Commissioner with wide discretion to…