Rev. Rul. 55-220

Revenue Ruling 54-63, C.B. 1954-1, 33, and Revenue Ruling 54-145, C.B. 1954-1, 38, set forth inventory price indexes for June, 1953, and December, 1953, respectively, and data in connection therewith, published by the Bureau of Labor Statistics for use by variety stores employing the retail and elective inventory methods. It also prescribed the conditions under which the use of such indexes would be acceptable, under section 22(d) of the Internal Revenue Code of 1939, in the filing of Federal income tax returns. Thereafter, industry sponsors having terminated arrangements for the preparation by the Bureau of Labor Statistics of the variety store inventory price indexes, publication by that Bureau of such indexes was discontinued, as announced in I.R.B. 1954-31, 20.

The fifth paragraph of Revenue Ruling 54-63, supra , provides as follows:

The use of such indexes published by the Bureau of , labor Statistics is not mandatory; indexes may be prepared by an individual taxpayer based upon his own data on prices and inventory quantities, if adequate, and if proof is submitted that sound statistical methods have been employed that assure reliable indexes, not only for the particular year in question, but for subsequent years. There may be no selective use of such indexes, however, combining the use of certain of the BLS indexes with respect to given departments and the use of other individual indexes with respect to other departments, except in the case of food, candy, and tobacco departments. Neither will alternate use of BLS indexes and individual indexes in successive taxable years be permitted.

However, publication by the Bureau of Labor Statistics of variety store inventory price indexes having been discontinued, variety store operators who had adopted such indexes in computing their inventories under the retail and elective inventory methods, will be permitted to use indexes prepared from their own data on prices and quantities, consistent with such Bureau of Labor Statistics indexes, in computing inventories under those methods on subsequent dates for which such indexes have not been published by the Bureau of Labor Statistics. Revenue Ruling 54-63, supra , is modified accordingly