Roy E. and Linda Day - Page 9

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                  the reduction of the taxpayer's tax under this subtitle                                
                  for any taxable years.                                                                 
                  Although section 58(h) was added to the Code at a time when                            
            the only minimum tax in the Code was the add-on rather than the                              
            AMT, it survived the transition between the two types of minimum                             
            tax that occurred in 1982 post-TEFRA.                                                        
                  That Congress affirmatively chose to retain the tax benefit                            
            rule in the wake of the Tax Reform Act of 1986, Pub. L. 99-514,                              
            100 Stat. 2085, is demonstrated by the fact that the provision                               
            was renumbered as section 59(g) and its language slightly                                    
            changed.  Nevertheless, there are substantive differences between                            
            former section 58(h) and current section 59(g).  Effective for                               
            taxable years after 1986, section 59(g), as amended by the                                   
            Omnibus Budget Reconciliation Act of 1989, Pub. L. 101-239, 103                              
            Stat. 2106, provides as follows:                                                             
                  The Secretary may prescribe regulations under which                                    
                  differently treated items shall be properly adjusted                                   
                  where the tax treatment giving rise to such items will                                 
                  not result in the reduction of the taxpayer's regular                                  
                  tax for the taxable year for which the item is taken                                   
                  into account or for any other taxable year. [Emphasis                                  
                  The substitution of the word "may" for "shall" in section                              
            59(g) renders the tax benefit rule discretionary.  (In First                                 
            Chicago Corp. v. Commissioner, 88 T.C. 663, 676 n.11 (1987),                                 
            affd. 842 F.2d 180 (7th Cir. 1988), we drew attention to the word                            
            change in section 59(g), but noted that it did not affect the                                
            outcome of that case since the change did not apply to the tax                               

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