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adjustment, Congress expressed no specific intent to give
hospitals a mechanism to contravene the provisions of section
481(a) and thereby omit items of income which they previously had
deferred under the cash method.
The cessation-of-business acceleration provision is in
harmony with the purposes of both sections 448 and 481 and is not
inconsistent with the statutory scheme as a whole. Moreover, the
cessation-of-business acceleration provision accelerates the 10-
year period given hospitals to spread the section 481(a)
adjustment only under explicit and limited circumstances that
prevent the omission or duplication of income. We believe the
regulation implements the purpose of the statute in a reasonable
manner and, thus, must be upheld as a permissible construction of
the statute. See Chevron U.S.A., Inc. v. Natural Res. Def.
Council, Inc., 467 U.S. at 842-843; United States v. Correll, 389
U.S. 299, 307 (1967).
Does the Cessation-of-Business Acceleration Provision Apply in
the Instant Case?
Additionally, petitioners contend that acceleration of the
section 481(a) adjustment is not required in the instant case
because the hospitals that transferred assets to the Category B
Corporations did not cease to engage in the hospital business
after the sale of those assets to HealthTrust. Respondent
counters that a taxpayer ceases business when there is an
elimination of the taxpayer's business completely or when there
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