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The Courts of Appeals uniformly relied on the following
rationale to support their conclusions that section 1.163-
9T(b)(2)(i)(A), Temporary Income Tax Regs., supra, is not
invalid: (1) The regulation is not inconsistent with either the
statute or its legislative history, and (2) the regulation is
supported by the Staff of the Joint Committee on Taxation,
General Explanation of the Tax Reform Act of 1986 (J. Comm. Print
1987), hereinafter referred to as the 1986 Blue Book. Kikalos v.
Commissioner, 190 F.3d at 798; McDonnell v. United States, 180
F.3d at 723 (adopting the rationale of Redlark v. Commissioner,
141 F.3d at 936); Allen v. United States, 173 F.3d at 537-538;
Redlark v. Commissioner, 141 F.3d at 941; Miller v. United
States, 65 F.3d at 690.
Although the judicial landscape surrounding section
163(h)(2)(A) has changed significantly since our decisions in
Redlark v. Commissioner, supra, and Kikalos v. Commissioner,
supra, the legislative landscape has not. Since section 1.163-
9T(b)(2)(i)(A), Temporary Income Tax Regs., supra, was published
in the Federal Register, Congress has not amended section
163(h)(2)(A) so as to compel a construction of section
163(h)(2)(A) contrary to the Secretary’s construction as embodied
7(...continued)
Commissioner, 190 F.3d 791, 794 (7th Cir. 1999), revg. T.C. Memo.
1998-92), none of the cited Court of Appeals opinions
specifically discussed the validity of this regulation.
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