Diebold, Inc. v. United States
Court of Federal Claims
16 Cl. Ct. 193 (1989)
- Written by Kelsey Libby, JD
Facts
Diebold, Inc. (plaintiff) manufactured and sold automated teller machines (ATMs). Prior to 1980, Diebold treated ATM-replacement modules as inventory, which allowed the cost to be deducted in a single year. In 1980, Diebold filed amended tax returns for 1976–1979 in which it changed its tax-accounting treatment of the modules to depreciable assets and claimed refunds for 1976 and 1977 as a result. Diebold maintained that the original accounting method was incorrect. At the time of the amended returns, Diebold’s 1976 and 1977 tax returns were being audited by the Internal Revenue Service (IRS) (defendant). The IRS disallowed the refund claims because Diebold failed to secure the commissioner of internal revenue’s consent before changing accounting methods. Diebold sought review, and the IRS filed a motion for summary judgment. In opposing the motion, Diebold argued that consent was not required because it was merely correcting an accounting error and it did not regularly use the original accounting method, and even if consent was required, the IRS consented directly or indirectly in the course of the audits.
Rule of Law
Issue
Holding and Reasoning (Rader, J.)
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