- 24 -
previously pointed out, see supra note 3, made no substantive
change. Besides the implication from the fact that the
regulation was only temporary, 11 months is a relatively short
period of time for considering its impact.
The second action is a 1990 proposal of the Senate Finance
Committee to amend section 163, by eliminating the deduction for
corporate taxpayers of interest on income tax deficiencies. In
explaining the proposed change of law, the Committee states:
Individuals are not permitted to deduct personal
interest. For this purpose, personal interest includes
interest on underpayment of the individual's income taxes,
even if all or a portion of the individual's income is
attributable to a trade or business. [136 Cong. Rec. S15711
(Oct. 18, 1990).]
First, this statement is not reliable evidence of
Congressional approval considering that it is only a proposal
entered into the Senate record, and that the provision was not
approved by Congress, nor is there any indication that the House
of Representatives even reviewed the proposal. Furthermore, the
proposed amendment contains an express restriction on the
deductibility of deficiency interest, which shows that Congress
knew how to restrict the deductibility of interest if it so
intended.
One final comment. Suppose that the only income reported on
the return of petitioners had been Schedule C income from Carrier
Communications and that the entire deficiency related to the type
of errors that the courts have previously concluded were expected
to occur in the ordinary course of business. E.g., Polk v.
Commissioner, supra. It would constitute an unrealistic
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