- 7 - Petitioners elected to use the periodic system6 of the nonaccrual-experience method to estimate on a hospital-by- hospital basis the portion of their income they would not collect (sometimes hereinafter referred to as the Uncollectible Amount), except that petitioners computed the Uncollectible Amount by using the formula (Original Formula)7 set forth in section 1.448- 2T(e)(2)(i), Temporary Income Tax Regs., 52 Fed. Reg. 22775 (June 16, 1987) (Original Temporary Regulations), rather than the formula (Amended Formula) set forth in amended section 1.448- 2T(e)(2), Temporary Income Tax Regs., 53 Fed. Reg. 12513-12514 (Apr. 15, 1988) (Amended Temporary Regulations). Hereinafter, we sometimes will refer to the method petitioners used to compute the Uncollectible Amount for years ended 1987 and 1988 as the modified periodic system. For taxable years ended 1987 and 1988, petitioners reduced (or increased) income of each hospital by the sum of (1) net 5 (...continued) collect. Sec. 448(d)(5). See infra pp. 17-21 for a detailed description of the nonaccrual-experience method. Pursuant to sec. 1.448-2T(h)(1), Temporary Income Tax Regs., 52 Fed. Reg. 22776 (June 16, 1987), consent to a change to the nonaccrual- experience method is granted automatically if the taxpayer is qualified to use that method. 6 The periodic system of the nonaccrual-experience method, described in Notice 88-51, 1988-1 C.B. 535, is similar to a reserve system. See infra pp. 20-21 for a detailed description of the periodic system. 7 The parties agree that the Original Formula is identical to the Black Motor formula.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011