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categories of debt. The tracing method of interest allocation
settled on by the Secretary is applicable across the board, not
just in the case of an indebtedness arising on account of an
underpayment. Indeed, it is difficult to discern a coherent
scheme of interest allocation from the three cited cases. It
would be a very small tail wagging a very large dog if we were to
let those cases determine what is a proper method of interest
allocation for all classifications of indebtedness.
3. Discrimination as to Form of Doing Business
The majority postulates that (1) the expenditure method of
allocation found in section 1.163-8T, Temporary Income Tax Regs.,
"excludes an entire category of interest expense in disregard of
a business connection such as exists herein" and (2) "Such a
result discriminates against the individual who operates his or
her business as a proprietorship instead of in corporate form
where the limitations on the deduction of 'personal interest'
would not apply." Majority op. pp. 16-17.
As a preliminary matter, the majority has not identified
the business connection here. The majority relies on cases whose
reasoning it concedes is confusing. Majority op. p. 11.
Moreover, the majority has warned that, to satisfy section
163(h)(2)(A), it is insufficient simply to show that the cause of
the deficiency interest is an underpayment of income tax
attributable to a trade or business. Majority op. pp. 26-27.
The majority has not specified the principles to be used in
deciding future cases. Assuming that there are such principles,
however, the majority does not explain why Congress may not
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