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petitioner is measured by their compensation, then that value is
somewhere in the neighborhood of $1 million (given that there
were numerous employees other than physician employees).
Petitioner, thus, had receipts of about $2 million attributable
to something other than the negotiated value (to the corporation)
of physician’s services, including chemotherapy drugs costing
$772,522. Petitioner’s receivables at the end of 1995 were
$148,557. I know of no rule of law that forecloses an inquiry
into whether, to reflect clearly petitioner’s income, the
receivables attributable to the chemotherapy drugs used during
the year should not be reported on an accrual method, as would be
the case under the hybrid method. Recently, in Oakcross
Vineyards, Ltd. v. Commissioner, T.C. Memo. 1996-433, affd. 142
F.3d 444 (9th Cir. 1998), we sustained the Commissioner’s
determinations that (1) the cash method did not clearly reflect a
farmer’s receipts from the sale of grapes and (2) an accrual
method was required. We surveyed many of the cases dealing with
a challenge by the Commissioner to the cash method, including
cases involving the Commissioner’s rejection of the cash method
for reporting receipts. Among the cases we surveyed were the
following: American Fletcher Corp. v. United States, 832 F.2d
436 (7th Cir. 1987) (credit card charge account service required
to change from cash method to an accrual method); Applied
Communications, Inc. v. Commissioner, T.C. Memo. 1989-469
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