- 12 -
We consider respondent's arguments seriatim. In so doing,
we explain why summary judgment is appropriate with respect to
IFNB's consumer, commercial, and agricultural loans but is not
appropriate with respect to its time deposits and CD's.
III. Respondent's First Argument: Security Bank Minn. v.
Commissioner Should Be Overruled
Respondent first asks the Court to reconsider its holding in
Security Bank Minn. v. Commissioner, supra, that section
1281(a)(2) of the short-term obligation rules does not require a
bank "to accrue interest on the short-term loans made to
customers in the ordinary course of its business." Security Bank
Minn. v. Commissioner, 98 T.C. at 43. In short, respondent here
argues, as in Security Bank Minn., that section 1281(a)(2)
requires the accrual of interest on all short-term obligations
held by a bank--without regard to the type of obligations
involved, or the manner in which the bank came to hold them.
Although respondent advances this argument with force and
cogency--and also tries to identify certain factual differences
between the loans at issue in this case and the loans considered
in Security Bank Minn. v. Commissioner, supra--we believe that
all respondent has done in advancing this argument is to ask us
to overrule Security Bank Minn., which we decline to do.10
10 For example, we note that most of IFNB's consumer,
commercial, and agricultural loans provided for payments of
interest at monthly intervals, as well as at maturity, while the
(continued...)
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