- 13 -
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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