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cause us to refrain from applying the doctrine of stare decisis
with respect to the section 1281(a)(2) issue.3
Respondent alternatively argues that the loans in question
were made in return for notes that contained "original issue
discount" within the purview of sections 1281(a)(1) and 1283.
According to respondent, section 1281(a)(1) requires petitioner
to accrue the daily portion of that discount during the year in
which the note was held, regardless of whether petitioner
actually received anything in that year.
In Security Bank Minn. v. Commissioner, supra at 37, the
Commissioner refrained from arguing that section 1281(a)(1)
applied, although he stated on brief that it "arguably does." It
was therefore not necessary for us to make a specific holding
regarding the application of section 1281(a)(1). In a technical
sense, respondent's proposed application of section 1281(a)(1)
presents an issue of first impression. However, we believe that
the analysis upon which the holding in Security Bank Minn. was
based compels us to hold against respondent's argument that
section 1281(a)(1) applies in the instant case.
Our holding in Security Bank Minn. that section 1281(a)(2)
did not apply to loans made by banks in the ordinary course of
3Respondent has made no argument that the issues presented
are of great overall significance. Sec. 448 generally precludes
corporations with more than $5 million in gross receipts from
using the cash method of accounting. Thus, our holdings appear
to have application only to small banks.
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