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I would think that the above authority would provide the
mechanism to handle the dissent’s hypothetical situation that
reflects bad faith and frivolous litigation.
Lastly, if, on policy grounds,1 expenses of the type in
dispute herein should be denied as a matter of law, it would
appear appropriate for Congress to do so by legislation, rather
than by opinion of this Court and by respondent’s strained
interpretation of the statutory provisions, under which the
expenses in dispute would be deductible under section 2053 for
civil tax deficiency purposes but, as a matter of law, would not
be deductible for purposes of the computation of the fraud
addition to tax. If Congress intends significant disparate
treatment in the allowance of identical expenses for two closely
related purposes, I would expect such disparate treatment to be
clearly set forth in the statutory scheme.
1A strong policy argument certainly can be made that because
the items in question in this case were fraudulent they never
should have been claimed on the estate tax return in the first
place and the subsequent and related litigation expenses then
never would have been incurred.
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