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We do not intend in the instant case to overrule any of the
three pre-TRA 1986 opinions--Standing, Polk, or Reise. The
statutory terms construed in those cases have been carried
forward from the Internal Revenue Code of 1939 and now appear in
section 162(a) (“paid or incurred * * * in carrying on any trade
or business”), section 62(a)(1) (“attributable to a trade or
business carried on by the taxpayer”), and section 172(d)(4)
(“attributable to a taxpayer’s trade or business”).
However, the result of the Congress’s decisions (1) to use
different language in section 163(h)(2)(A) and (2) to provide in
section 163(h)(1) that the disallowance rule overrode everything
else in chapter 1, is that, as to the issue we cited them for in
Redlark, the pre-TRA 1986 opinions have become irrelevant to the
determination of chapter 1 tax liabilities.
(4) The Conference Report, The 1986 Blue Book
In Redlark v. Commissioner, 106 T.C. at 42-45, we discussed
the following sentence from the TRA 1986 conference committee
explanation--
Personal interest also generally includes interest on
tax deficiencies
--with special focus on “generally” and “tax deficiencies”. We
noted that “deficiency” is a term of art with a settled
11(...continued)
enacted TRA 1986 language or the enacted TAMRA 1988 language was
intended to have the same meaning as the language interpreted in
the pre-TRA 1986 opinions.
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