No Inventory Reported on Tax Return for Restaurant?

So I'm working on this medium-sized restaurant (pretty big as compared to most 1120s returns I prepare), and there's no inventory reported over the last few years.

This new client is coming form a very expensive glass-tower firm.

There was no beginning or ending inventory on the tax returns (ever) and the client says he's never done it.

Shouldn't there be just a little bit of food there?

You would think there would be inventory on hand. I recall the firm I worked at did have inventory. However, I do believe they'd fall under the Small business taxpayer exception. If gross revenue is less than $26 million the prior 3 years, they'd be considered a Small business taxpayer. I actually kept forgetting about this as when I started my practice, I did have inventory on clients' returns.

Probably, but it wouldn't be anything I'd get too excited about.

new inventory rules for small taxpayers allow a taxpayer to expense in line with their accounting policy (if you will)...if the policy is to expense everything as purchased, seems like it works

See sec 471(c) but watch out for 451(b)(3). Need to not have an AFS.

And this seems practical. https://notyourdadscpa.com/can-i-deduct ... rchase-it/

Look in old threads on this topic. The best argument was that a DMSH election plus NIMS treatment to expense most inventory would be sustainable. This is in the JCT Blue Book. The other approach could collapse since expensing is not ordinarily an “inventory method”, outside of JIT and lean approaches.

OMG you all are the best, thanks.