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the payment of the fine to be an expense of that business. See
Commissioner v. Tellier, 383 U.S. 687, 689 (1966); Ostrom v.
Commissioner, 77 T.C. 608, 613 (1981).
Respondent also concedes that section 162(f), which
disallows the deduction of "any fine or similar penalty paid to a
government for the violation of any law", does not apply to
petitioner's payment of the CME fine. Accordingly, no question
as to the allowability of the deduction on public policy grounds
is involved. Sec. 1.162-1(a), Income Tax Regs. ("A deduction for
an expense * * * which would otherwise be allowable under section
162 shall not be denied on the grounds that allowance of such
deduction would frustrate a sharply defined public policy");1 see
also S. Rept. 92-437, at 72 (1971), 1972-1 C.B. 559, 599; S.
Rept. 91-552, at 247 (1969), 1969-3 C.B. 423, 597. Consequently,
the only matter remaining in dispute is whether the payment of
the CME fine was "ordinary" and "necessary", which is a question
of fact. Commissioner v. Heininger, 320 U.S. 467, 475 (1943).
The general guidelines for deciding whether an expense is
"ordinary and necessary" are well established. Two significant
aspects of the term "ordinary" have been identified by the cases
construing section 162(a) and its predecessors. In Commissioner
v. Tellier, supra at 689-690, the Supreme Court noted that the
1 The Commissioner has also taken this position in rulings.
See, e.g., Rev. Rul. 80-211, 1980-2 C.B. 57.
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