James E. Redlark and Cheryl L. Redlark - Page 13

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               Ibid.  But "if the statute is silent or ambiguous with                 
               respect to the specific issue, the question for the                    
               court is whether the agency's answer is based on a                     
               permissible construction of the statute."  Id., at 843.                
               If the administrator's reading fills a gap or defines a                
               term in a way that is reasonable in light of the                       
               legislature's revealed design, we give the                             
               administrator's judgment "controlling weight."  Id., at                
               844. [NationsBank v. Variable Annuity Life Ins. Co.,                   
               513 U.S.    ,    , 115 S.Ct. 810, 813-814 (1995);                      
               citations omitted.]                                                    
               Section 163(h)(2)(A) was added to the Internal Revenue Code            
          by the Tax Reform Act of 1986, Pub. L. 99-514, sec. 511(b), 100             
          Stat. 2085, 2246.  The key phrase that governs the disposition of           
          this case involves the exception from personal interest of                  
          "interest paid or accrued on indebtedness properly allocable to a           
          trade or business".  We have previously noted that the original             
          version of this provision was different but that the language               
          change was not intended to make any substantive change.  See                
          supra note 3.  Arguably, this language in and of itself is                  
          sufficient to enable petitioners to prevail, since such interest            
          on Federal income tax deficiencies was considered, at least in              
          situations such as that involved herein, as an ordinary and                 
          necessary business expense under predecessors of section 162 and            
          therefore of section 62(a)(1) by the pre-section 163(h) cases, a            
          view also adopted with respect to net operating loss carryovers             
          and carrybacks.  Reise v. Commissioner, supra; Polk v.                      
          Commissioner, supra; Standing v. Commissioner, supra.  We note,             
          however, that, in a comparable situation dealing with the                   
          deduction of State income taxes in computing adjusted gross                 
          income, we found sufficient ambiguity to cause us to look at the            





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