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the transitional rules will apply with the section 481
adjustment amount to be included in income over a period not
to exceed ten taxable years, rather than five. * * *
[Emphasis supplied.]
___________
4Under that revenue procedure, the adjustment from a
change in accounting generally is included in income
over a period equal to the less [sic] of the number of
years the taxpayer has used the accounting method or a
specified number of years.
Petitioners assert that the quoted excerpt is based on
language that was not enacted.8 Under the bill as originally
proposed, the spread for hospitals was a period that "shall not
exceed" 10 years. The law as enacted, however, provides for a
spread period that "shall be" 10 years. Petitioners argue that
the fact that the provision was changed demonstrates that the
difference in treatment for hospital and nonhospital businesses
was intentional.
Petitioners maintain further that the legislative history
relating to section 448(d)(7)(C) confirms that Congress intended
to make a distinction between hospitals, which were given a fixed
10-year period to spread section 481(a) adjustments required as a
8 As originally reported by the House Committee on Ways and
Means on Dec. 7, 1985, the provision in the bill that
subsequently became sec. 448(d)(7)(C) provided as follows:
the period for taking into account the adjustment under
section 481 by reason of such change [from the cash
method to an accrual method of accounting] shall not
exceed 5 years (10 years in the case of a hospital
described in section 144(b)(3)). [H.R. 3838, 99th
Cong., 1st Sess. sec. 902 (1985).]
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