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Thus, the conference committee report does not exclusively
support the majority's interpretation of the statute. The aspect
of the report relied on by the majority is ambiguous and should
be given little weight in determining what deficiency interest is
personal interest. The ambiguity of the report only supports the
conclusion that the regulation at issue here is valid, because
the statute, itself, is ambiguous.
2. And What About Reise, Polk, and Standing?
In reaching its conclusion that section 1.163-
9T(b)(2)(i)(A), Temporary Income Tax Regs., is invalid, the
majority relies on Reise v. Commissioner, supra; Polk v.
Commissioner, supra; and Standing v. Commissioner, supra, for the
proposition that certain deficiency interest has been interpreted
to constitute a trade or business expense for various purposes,
e.g., for applying section 62(a)(1) in determining adjusted gross
income. The majority apparently believes that those
interpretations have been woven into the fabric of the Code in
such a way that only a specific act of Congress could remove
them. Majority op. p. 15. In the context in which those
interpretations were made (e.g., a question arising under what is
now section 62(a)(1), when the distinction between business and
personal interest was otherwise unimportant), perhaps the
majority has a point. The majority's focus, I submit, is too
narrow. The proper allocation of indebtedness for purposes of
section 163(h)(2)(A) is not limited to indebtedness giving rise
to deficiency interest. Congress left it to the Secretary to
interpret the statutory command--"properly allocable”--for all
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