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United States v. Correll, 389 U.S. 299, 306-307 (1967); Udall v.
Tallman, 380 U.S. 1, 16-17 (1965).
The Original Formula as promulgated in section 1.448-
2T(e)(2)(i), Temporary Income Tax Regs., 52 Fed. Reg. 22775 (June
16, 1987), used the Black Motor formula to determine the
Uncollectible Amount.14 The Original Formula provides that the
Uncollectible Amount would be calculated as follows:
Total bad debts with respect to accounts
Uncollectible Accounts receivable sustained during the current
amount of a = receivable x tax year and 5 preceding tax years less
receivable outstanding recoveries of bad debts during that period
at yearend sum of the accounts receivable at
yearend for the same 6-year period
14 As originally promulgated, sec. 1.448-2T(e)(2)(i), Temporary
Income Tax Regs., read as follows:
(2) Six-year moving average--(i) General rule.
For any taxable year the uncollectible amount of a
receivable is the amount which bears the same ratio to
the accounts receivable outstanding at the close of the
taxable year as (A) the total bad debts with respect to
accounts receivable sustained during the period
consisting of the taxable year and the five preceding
taxable years (or with the approval of the
Commissioner, a shorter period), adjusted for
recoveries of bad debts during such period, bears to
(B) the sum of the accounts receivable at the close of
such six (or fewer) taxable years. Accounts receivable
described in paragraphs (c) [amounts due for which
interest is required to be paid, or for which there is
any penalty for failure to timely pay any amounts due]
and (d) [accounts receivables related to amounts not
earned by the taxpayer through the performance of
services by the taxpayer] of this section are not taken
into account in computing the ratio. [Sec. 1.448-
2T(e)(2)(i), Temporary Income Tax Regs., 52 Fed. Reg.
22775 (June 16, 1987)].
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