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Circuit acknowledged that it was reasonable that income tax
deficiencies should properly be considered allocable to their
business. Id. at 939. The court, however, applied Chevron and,
like the Eighth Circuit, relied on the Blue Book to conclude that
the 9T regulation was a permissible construction of the statute.
Id. at 939, 941.
C. Allen--Fourth Circuit
The U.S. Court of Appeals for the Fourth Circuit concluded
that section 163(h) was ambiguous. Allen v. United States, 173
F.3d 533, 534 (4th Cir. 1999). It based this conclusion on “the
absence of a statutory directive” as to the meaning of “properly
allocable” and the fact that there were “sharply divergent
opinions” in Redlark.3 Id. at 536. The court applied Chevron
and accorded the 9T regulation Chevron deference. Id. at 537.
The Court of Appeals for the Fourth Circuit also relied on the
Blue Book to conclude that the 9T regulation was a permissible
construction of the statute. Id. at 537-538.
D. McDonnell--Sixth Circuit
The U.S. Court of Appeals for the Sixth Circuit, without
analysis, simply relied on the analysis of the Court of Appeals
for the Ninth Circuit in Redlark. McDonnell v. United States,
180 F.3d 721, 723 (6th Cir. 1999).
3 This suggests that every time a statute fails to define a
word or term, or any time judges disagree regarding the meaning
of a word or phrase in a statute, the statute is automatically
ambiguous.
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