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pursuant to either the reserve method of accounting or under the
Black Motor formula.
We also do not agree that the result under the Amended
Formula is not determined on the basis of the hospitals'
experience. The formula utilizes the bad debt history and
accounts receivable of the hospitals, not some fictional entity.
Petitioners contend further that section 448(d)(5) does not
authorize the prescription of a single formula to be used by all
taxpayers. They argue that prescribing a single fixed formula is
inconsistent with the notion of making a determination "on the
basis of experience" and represents an inappropriate departure
from the plain, everyday meaning of the language of section
448(d)(5) because it results in income being accrued on a basis
other than the taxpayer's actual experience.
We do not agree with petitioners that the temporary
regulation is invalid because it provides one formula to be
applied by all taxpayers to determine the Uncollectible Amount.
Although the legislative history of section 448(d)(5) is not
without ambiguity as to the specific formula to be utilized, the
description of the nonaccrual-experience method in the House
report suggests a congressional preference for a fixed formula
for calculating the Uncollectible Amount. See H. Rept. 99-426,
at 608 (1985), 1986-3 C.B. (Vol. 2) 1, 608. The ambiguity in the
legislative history does not arise because the report fails to
use a fixed formula but because it describes that fixed formula
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