- 28 -
448(d)(5) is ambiguous as to the meaning of "experience". We
next look to the statute's legislative history in an attempt to
ascertain congressional intent.
Does the Legislative History Clearly Reveal Congressional
Intent as to the Formula To Apply?
Petitioners maintain that the legislative history of section
448(d)(5) does not clearly reveal Congress' intent as to the
proper formula to apply. A description of the nonaccrual-
experience method formula is contained only in the report of the
Committee on Way and Means.12 Because that report contains
conflicting language, we do not think it clearly describes the
formula. H. Rept. 99-426, at 608 (1985), 1986-3 C.B. (Vol. 2) 1,
608, states in pertinent part as follows:
Amount of accrual
The committee bill provides that an accrual basis
taxpayer need not accrue as income any portion of
amounts billed for the performance of services which,
on the basis of experience, it will not collect. * * *
The amount of billings that, on the basis of
experience, will not be collected is equal to the total
amount billed, multiplied by a fraction whose numerator
is the total amount of such receivables which were
billed and determined not to be collectible within the
most recent five years taxable years [sic] of the
12 A provision comparable to sec. 448(d)(5) was not present in
the Senate amendment, and the conference report does not describe
the nonaccrual-experience method formula. See H. Conf. Rept. 99-
841 (Vol. 2), at II-285 to II-289 (1986), 1986-3 C.B. (Vol. 4) 1,
285-289.
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