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identical to the section 22(n)(1), I.R.C. 1939, language
construed in Standing and so should have the same meaning as in
Standing. In Reise v. Commissioner, 35 T.C. at 579-580, we noted
that neither Standing nor Polk discussed our earlier opinion in
Aaron v. Commissioner, 22 T.C. 1370 (1954), in which we had held
that interest on a tax underpayment was not attributable to the
taxpayer’s trade or business within the meaning of section
122(d)(5), I.R.C. 1939. In Reise we thereupon overruled Aaron
and reaffirmed the position we took in Polk that the interest on
the tax underpayment was attributable to the taxpayer’s trade or
business.
In Redlark v. Commissioner, 106 T.C. at 37, we then
summarized the effect of the foregoing cases as follows:
Concededly there is some confusion in the reasoning of
the decided cases, but the thrust of their bottomline
conclusions is clear. Exceptions will be accorded to the
“ordinary and necessary” provision of section 162 only when
there is explicit legislative indication that such a result
was intended. Thus, we agree with petitioners that there is
a consistent body of pre-section 163(h) case law holding
that, at least under limited circumstances such as were
involved in Standing v. Commissioner, supra, Polk v.
Commissioner, supra, and Reise v. Commissioner, supra,
deficiency interest is a deductible business expense under
section 162 and therefore under section 62(a)(1). See
Brennan & Megaard, “Deducting Interest on Noncorporate Trade
or Business Tax Deficiencies: Uncertainty Exists Under the
New Temporary Regulations”, 13 Rev. of Taxn. of Individuals
22 (1989).
Later in our opinion in Redlark v. Commissioner, 106 T.C. at
43, we pointed out that
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