- 14 -
was closer to a conditional sales agreement than to a lease. See
id. at 654. The Court did not consider the effect of TEFRA
section 210. After the decision of the Court of Appeals in Swift
Dodge, the Commissioner proposed regulations which would have
prevented leases containing TRAC provisions from being treated as
leases. See sec. 1.168(f)(8)-12, Proposed Income Tax Regs., 47
Fed. Reg. 52730 (Nov. 23, 1982).
During 1984 Congress enacted section 168(f)(13) as part of
the Deficit Reduction Act of 1984 (DEFRA), Pub. L. 98-369, sec.
32, 98 Stat. 494, 530. DEFRA section 32 is virtually identical
to current section 7701(h), which was enacted during 1986 as part
of the Tax Reform Act of 1986 (TRA 1986), Pub. L. 99-514, sec.
201(c), 100 Stat. 2085, 2138. The legislative history of DEFRA
section 32 specifically refers to: (1) Our decision in Swift
Dodge, (2) the decision of the Court of Appeals for the Ninth
Circuit in Swift Dodge, and (3) the proposed regulations. See H.
Rept. 98-432, at 1615 (1984); S. Rept. 98-169, at 865 (1984); H.
Conf. Rept. 98-861, at 801 (1984), 1984-3 C.B. (Vol. 2) 1, 55.
By those references, we know that, when DEFRA section 32 was
enacted, Congress was aware of our holding and the Court of
Appeals' holding in Swift Dodge, as well as the proposed
regulations. Consequently, when the DEFRA section 32 was enacted
and when the current, identical section 7701(h) was enacted as
part of TRA 1986, Congress, being well aware of those holdings
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