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preference items. Stated otherwise, the taxpayer in such a case
theoretically could have avoided payment of the add-on minimum
tax by simply not claiming the items of tax preference.
First Chicago Corp. resolved this anomaly by holding that if
a taxpayer did report such items, and they resulted in no
immediate tax benefit, they would not increase the add-on minimum
tax for that year. First Chicago Corp. v. Commissioner, 842 F.2d
at 183. No such anomaly is present in cases involving the AMT.
In contrast to the add-on minimum tax at issue in First Chicago
Corp., a taxpayer cannot avoid AMT liability simply by failing to
claim preferences.
There is another important distinction between First Chicago
Corp., which involved section 58(h), and the instant case.
Whereas section 58(h) was mandatory even in the absence of
implementing regulations, the application of section 59(g) lies
at the discretion of the Secretary. See First Chicago Corp. v.
Commissioner, 88 T.C. at 669, 676 n.11. Unlike our decision in
First Chicago, where the Court reluctantly felt it necessary to
do the Secretary's job, the discretionary nature of section 59(g)
relieves us of that awkward responsibility. First Chicago Corp.
v. Commissioner, 88 T.C. at 669, 671, 676-677.
4. Petitioners Received a Current Tax Benefit from Tax
Preference Items
Finally, if the Court were to sanction petitioners'
computation of AMTI, petitioners' tax liabilities would
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