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hospitals, ancillary services include group and individual
therapy.
OPINION
Section 446(a)16 requires a taxpayer to compute taxable
income under the method of accounting it regularly uses in
16
Sec. 446 provides in pertinent part as follows:
SEC. 446. GENERAL RULE FOR METHODS OF ACCOUNTING.
(a) General Rule.--Taxable income shall be computed
under the method of accounting on the basis of which the
taxpayer regularly computes his income in keeping his books.
(b) Exceptions.--If no method of accounting has been
regularly used by the taxpayer, or if the method used does
not clearly reflect income, the computation of taxable
income shall be made under such method as, in the opinion of
the Secretary, does clearly reflect income.
(c) Permissible Methods.--Subject to the provisions of
subsections (a) and (b), a taxpayer may compute taxable
income under any of the following methods of accounting--
(1) the cash receipts and disbursements method;
(2) an accrual method;
(3) any other method permitted by this chapter;
or
(4) any combination of the foregoing methods
permitted under regulations prescribed by the
Secretary.
(d) Taxpayer Engaged in More Than One Business.--A
taxpayer engaged in more than one trade or business may, in
computing taxable income, use a different method of
accounting for each trade or business.
(e) Requirement Respecting Change of Accounting
Method.--Except as otherwise expressly provided in this
chapter, a taxpayer who changes the method of accounting on
the basis of which he regularly computes his income in
keeping his books shall, before computing his taxable income
under the new method, secure the consent of the Secretary.
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