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The emphasized language in the above quotation from the
legislative history can be read to indicate that Congress in 1986
intended to carve out of the definition of personal interest all
interest relating to a trade or business. Once all trade or
business interest is carved out of personal interest by the above
emphasized language, the next sentence generally describing
personal interest only reaches types of interest left over, but
not business interest that already is carved out by the prior
language. With this reading of the legislative history, the last
sentence in the above quotation (namely, “Personal interest also
generally includes interest on tax deficiencies.”) may be read to
reach only interest on tax deficiencies not related to a
taxpayer’s trade or business.
Of the approximately 15 law review and journal articles pre-
and post-Redlark v. Commissioner, 106 T.C. 31 (1996), revd. and
remanded 141 F.3d 936 (9th Cir. 1998), that comment substantively
on the issue before us, seven support our original Redlark
opinion on the statutory interpretation,2 and one supports it on
2 Eller, “Interest Deduction for Noncorporate Tax
Deficiencies”, 56 Taxn. for Acct. 209, 211 (1996); Lipton,
“Redlark Reversed but Interest Deductions for Business Tax
Deficiencies is Still an Open Issue”, 89 J. Taxn. 24, 28 (1998);
Lipton, “Divided Tax Court Allows Deduction of Interest on Tax
Arising From a Trade or Business”, 84 J. Taxn. 218, 222 (1996);
Newmark & Englebrecht, “Courts Split on Individuals’ Deficiency
Interest Deduction”, 62 Prac. Tax Strat. 87, 95 (1999); Raby &
Raby, “Allocating Individual Tax Deficiency Interest”, 70 Tax
Notes 573, 575 (1996); Andreozzi, Comment, “Prohibiting the
Deduction for Noncorporate Tax Deficiency Interest: When
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