- 21 -
years." (Emphasis added.) We believe, however, that Congress'
choice of the words "in the case of a hospital" rather than the
phrase "in the case of hospitals" renders section
448(d)(7)(C)(ii) ambiguous inasmuch as it is silent as to the
question of whether, where a taxpayer is engaged in the business
of operating hospitals, the tax benefit of spreading over 10
years a section 481(a) adjustment required to conform a
hospital's method of accounting to section 448(a) belongs to the
hospital to which the adjustment is attributable or to the
taxpayer that owns that hospital. Neither the statute nor the
legislative history addresses that precise question.
Additionally, the language of section 448(d)(7)(C) gives no
indication that Congress gave any consideration to the treatment
of the section 481(a) adjustment where a hospital ceases to
engage in the trade or business giving rise to that section
481(a) adjustment or where the hospital terminates existence
prior to the end of the spread period. Nor is there any evidence
in the legislative history of section 448 that Congress ever had
a specific or particular intent with respect to that question.
The statute, thus, has left gaps creating ambiguity as to
its precise meaning.9 Regulations issued under section
9 Moreover, by treating the change in method of accounting
required under sec. 448(a) as a change initiated by the taxpayer,
see sec. 448(d)(7)(A), it could be argued that the statute
indicates a congressional intent to permit the Commissioner to
impose reasonable terms and conditions on the making of that
(continued...)
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