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BEGHE, J., concurring in part and dissenting in part:
Having joined the side opinions of Judges Ruwe and Halpern, I
write on to empathize with the concerns that may underlie the
majority’s view on the treatment of the overhead costs, as
amplified by Judge Swift’s concurrence.
It bears observing that the oft-quoted passage in the
opinion of the Court of Appeals for the Seventh Circuit in
Encyclopaedia Britannica, Inc. v. Commissioner, 685 F.2d 212, 217
(7th Cir. 1982), revg. T.C. Memo. 1981-255, which includes the
statement that “The administrative costs of conceptual rigor are
too great,” was uttered in the course of sustaining the
Commissioner’s determination that the costs in issue in that case
had to be capitalized. However, the Court of Appeals then
suggested that the distinction between recurring and nonrecurring
costs might provide the line of demarcation in some cases, but
went on to observe that the distinction wouldn’t make sense when
the taxpayer’s sole business was the creation or acquisition of
capital assets. Although ACC’s business includes the servicing
as well as the acquisition of capital assets, the relatively
short average time the acquired loans remain outstanding raises
questions about administrability, the costs of conceptual rigor,
and whether the exercise has been worth the candle.
These musings lead me to suggest the time has come to
request respectfully that the Congress step in and enact some
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