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which petitioner operates in relation to the other service
industries we have addressed on this issue and bear in mind the
recent case of Hospital Corp. of Am. v. Commissioner, 107 T.C.
116, 143-145 (1996). There, as explained in more detail below,
we held that the income attributable to the pharmaceuticals and
various medical supplies frequently used by the personnel of the
taxpayer/hospital while performing medical services was not
income from the sale of goods for purposes of the nonaccrual-
experience method of section 448(d)(5).4 We held that those
items were "inseparably connected" to the taxpayer's services.
See id. at 143.
Like the taxpayer in HCA, petitioner's business is a
quintessential service business. It is a health care provider
that administers chemotherapy treatments to patients with cancer.
Although it furnishes chemotherapy drugs to its patients as part
of its service, a person cannot obtain the drugs but for the
chemotherapy treatments, and the treatments require the extensive
and specialized service of petitioner's professional staff.
Petitioner's professional staff, as an integral and indispensable
part of furnishing chemotherapy drugs to a patient, must examine
the patient and prescribe a treatment regime, monitor the length,
4 The medical supplies included items such as radiological
dyes, casts, crutches, canes, walkers, bandages, sutures,
splints, skin staples, various implants such as joint
replacements, pacemakers, heart valves, orthopedic devices, and
physical and occupational therapy items.
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