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Respondent’s litigating position is that section 469 is not
self-executing. Therefore, in respondent’s view, taxpayers are
unable to claim self-charged offsets for items other than
interest, and, in the absence of specific regulations, courts
would not be permitted to decide that nonlending transactions are
subject to self-charged treatment. Conversely, petitioners argue
that section 469 is self-executing, they are entitled to claim
self-charged treatment, and this Court is permitted to approve
such treatment. We agree with petitioners.
In general, where regulations have been necessary to
implement a statutory scheme providing favorable taxpayer rules,
this Court has found that the statute’s effectiveness is not
conditioned upon the issuance of regulations. See Estate of
Maddox v. Commissioner, 93 T.C. 228, 233-234 (1989); First
Chicago Corp. v. Commissioner, 88 T.C. 663, 676-677 (1987), affd.
842 F.2d 180 (7th Cir. 1988); Occidental Petroleum Corp. v.
Commissioner, 82 T.C. 819, 829 (1984). As in the above-cited
cases, we are placed in the difficult position of “doing the
Secretary’s work” where there is a failure to issue regulations
that are congressionally intended. First Chicago Corp. v.
Commissioner, supra at 677. If Congress intended relief from the
passive activity rules for self-charged transactions, we must
decide whether petitioners’ claim is within that intent. In
other situations, we have held that the U.S. Department of the
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