If you are a small business taxpayer you can choose not to keep an inventory, but you must still use a method of accounting for inventory that clearly reflects income . You qualify as a small business taxpayer if you: have average annual gross receipts of $26 million or less (indexed for inflation) for the 3 prior tax years, and are not a tax shelter.
if that's what you're selling I see no exception for treating the items as inventory. factually, if you failed to account for them, you would not be fairly reporting income which would be a substantial tax issue.
If are buying inventory, selling inventory, and holding some inventory (bought in one year but will sell in a future year), why would you not report your inventory?
If you are doing something else, you would need to let us know more about your business so we can understand your question.
thank you, I am purchasing items such as balls, helmets, jerseys. Then I am getting them signed and then authenticated and then selling on ebay. It's difficult to track the inventory. It would be much simpler to use the cash method of accounting, just tracking expenses and income.
I read this and assumed I could use the cash method: