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we have consistently been reluctant to conclude that
Congress overruled existing case law when the statutory
language does not compel such a conclusion and Congress has
not otherwise expressly indicated that such a result should
ensue. * * *
As we noted, supra, in H.R. 3838 as reported by the Ways and
Means Committee, “nonbusiness interest” was defined to exclude
“any interest which is allowable as a deduction in computing
adjusted gross income”. Proposed amendment to sec. 163(d)(3)(B)
in sec. 402(a) of H.R. 3838 as reported by the Ways and Means
Committee. If that language had been enacted, then our Redlark
analysis of the statute would properly have led to the conclusion
that interest on a tax underpayment under the circumstances of
Redlark and the instant case would continue to be deductible
under section 162 and that section 163 would not affect that
deductibility, and that regulations to the contrary would be
contrary to the statute.
However, that language was not enacted. See infra,
Appendix. Instead, in TRA 1986 the Congress defined “personal
interest” to exclude “interest paid or accrued on indebtedness
incurred or continued in connection with the conduct of a trade
or business”. Sec. 163(h)(2)(A) (emphasis added). In TAMRA 1988
the Congress changed the language so as to exclude from personal
interest “interest paid or accrued on indebtedness properly
allocable to a trade or business.” Sec. 163(h)(2)(A) (emphasis
added). In Standing, Polk, and Reise, the critical statutory
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