If your gross receipts from sales were under $26 million over the last 3 years, you are not required to report inventory. Most small businesses report the purchase of inventory as Merchandise Expense (or Materials/Supplies).
If this applies to you, instead of amending three years of returns, simply report zero ending inventory next year. Report the beginning inventory balance as an expense, either with your other purchases or as a separate line item under Other Miscellaneous Expenses. After that, you don't need to include inventory or Cost of Goods Sold on your return.
This is not a change in accounting method. You have liquidated your inventory so you can expense items as they are purchased.
See IRS Pub 334 Inventories
@sept031989
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