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Respondent also determined that petitioners are liable for
increased interest under section 6621(c)2 for each year in issue.
The issue we decide in the instant opinion3 is whether
respondent's determination changing certain petitioners from a
hybrid method of accounting to an overall accrual method of
accounting for the taxable years ended 1981 through 1986 was an
abuse of respondent's discretion.
FINDINGS OF FACT
Some of the facts have been stipulated for trial pursuant to
Rule 91. The stipulated facts are incorporated herein by
reference and are found accordingly.
During the years in issue, petitioners were members of an
affiliated group of corporations whose common parent was Hospital
2
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
3
The instant case involves several issues, some of which have
been settled. The issues remaining for decision involve matters
falling into four reasonably distinct categories, which the
parties have denominated as the tax accounting issues, the MACRS
depreciation issue, the HealthTrust issue, and the captive
insurance or Parthenon Insurance Co. issues. Issues involved in
the first three categories were presented at a special trial
session, and the captive insurance issues were severed for trial
purposes and were presented at a subsequent special trial
session. Separate briefs of the parties were filed for each of
the distinct categories of issues. The instant opinion involves
one of the tax accounting issues. The other issues remaining for
decision will be addressed in one or more separate opinions
subsequently to be released.
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