Cambo Corporation, a calendar-year taxpayer, was formed in 2015 and incurred \(\$ 60,000\) in organizational expenditures. Had the corporation made a proper election under Code Sec. 248, it would have been entitled to a \(\$ 7,000\) deduction in 2015 . However, on its 2015 tax return it erroneously claimed a \(\$ 60,000\) current deduction (i.e., it expensed the full amount in the year it was organized). Upon audit in 2018, the IRS disallowed the \(\$ 60,000\) deduction and also did not allow Cambo a \(\$ 7,000\) deduction. Cambo Corporation seeks your advice on this issue.

(See Reg. \$1.248-1(c); Bay Sound Transportation Co, 1967-2 USTC 99641 (DC Texas 1967), affd in part and rev'd in part on other issues, 1969-1 USTC 99371,410 F.2d 505 (CA-5 1969).)