Antonio and Joyce Rosario - Page 7




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               Hospital, will be referred to as a “Gross Guarantee                    
               Payment”).  If, during any month of the term of this                   
               Agreement, Physician’s income is greater than                          
               $33,334.00, Physician will pay to Hospital by the tenth                
               day after the closing of Physician’s books for the                     
               month, the excess over $33,334.00, to the extent                       
               necessary to reimburse hospital for Gross Guarantee                    
               Payments previously paid.  Such payments by Physician                  
               will be made to the Hospital during the term of this                   
               Agreement until the total amount of Gross Guarantee                    
               Payments made by Hospital have been repaid in full.                    
          The main ambiguity in the practice agreement was that the above             
          language could have been construed to favor respondent’s view               
          that petitioner would have to repay the hospital only to the                
          extent his monthly income were over $33,334; therefore, the                 
          guarantee payments would not be characterized as a loan because             
          there would not be an unconditional obligation for petitioner to            
          pay them back.  United States v. Henderson, 375 F.2d 36, 39 (5th            
          Cir.1967); Bouchard v. Commissioner, 229 F.2d 703 (7th Cir.                 
          1956), affg. T.C. Memo. 1954-243; Haag v. Commissioner, 88 T.C.             
          604, 615-616 (1987), affd. without published opinion 855 F.2d 855           
          (8th Cir. 1988).  The above language also could have been                   
          construed to favor petitioner’s view that it required petitioner            
          to pay back the guarantee payments in all events, which would               
          support characterizing the payments as a loan.                              
               On January 1, 1994, petitioner and the hospital signed an              
          amended practice agreement that provided:                                   
               Hospital intended that Physician, upon expiration of                   
               the Income Guarantee, be required to repay that portion                
               of the Income Guarantee not repaid pursuant to the                     






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