- 53 -
States, 731 F.2d at 1184-1185 (court distinguished the credit
card cases by virtue of the fact that the expense of the taxpayer
before it created a separate and distinct asset). Contrary to
petitioners’ assertion (and, as discussed infra, the view of the
Court of Appeals for the Third Circuit), we do not read any of
the credit card cases to hold that everyday, recurring expenses
are ipso facto deductible under section 162(a). In fact, as this
Court observed in Iowa-Des Moines Natl. Bank v. Commissioner, 68
T.C. at 879, costs are entitled to deduction when they are
“related to the active conduct of an existing business and * * *
[do] not create or enhance a separate and distinct asset or
property interest.” Nor do we understand the Supreme Court in
INDOPCO, Inc. v. Commissioner, 503 U.S. 79 (1992), to have
espoused the sweeping pronouncement proffered by petitioners as
to this issue.27
Petitioners also rely on PNC Bancorp, Inc., v. Commissioner,
212 F.3d 822 (3d Cir. 2000), revg. 110 T.C. 349 (1998). When
this case was tried, the Court of Appeals for the Third Circuit
had not yet released its opinion in that case, and petitioners
26(...continued)
Court of Appeals for the Ninth Circuit adopted as the law of that
circuit the decision of the Tenth Circuit in Colorado Springs
Natl. Bank v. United States, 505 F.2d 1185 (10th Cir. 1974).
27 Nor do we read Bankers Dairy Credit Corp. v.
Commissioner, 26 B.T.A. 886 (1932), to hold that salaries and
benefits are ipso facto deductible when they are recurring costs.
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