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definition. We interpreted the conference committee sentence as
follows (106 T.C. at 44-45):
In short, we think that when the conference committee
used the phrase “tax deficiencies”, it was referring to
amounts due by way of income, estate, and gift taxes. In
this context, the word “generally” in the conference
committee report takes on a significant meaning. It signals
that not all interest relating to income tax, etc.,
deficiencies are included in “personal interest”. The
logical explanation for what is excluded by “generally” is
such interest that constitutes an ordinary and necessary
business expense and is therefore “allocable to an
indebtedness of a trade or business” within the meaning of
the exception clause of section 163(h)(2)(A). To adopt
respondent’s position would require us to substitute the
word “always” for “generally” and to expand the
interpretation of the word “deficiencies” beyond its
accepted meaning to encompass taxes other than income, etc.,
taxes in order to account for the use of the word
“generally”. By way of contrast, our interpretation accepts
the established meaning of “deficiencies” and gives effect
to “generally” without modification.
We then discussed the 1986 Blue Book’s status and concluded
as follows (106 T.C. at 45-46):
Where there is no corroboration in the actual legislative
history, we shall not hesitate to disregard the General
Explanation as far as congressional intent is concerned.7
See Estate of Wallace v. Commissioner, 965 F.2d 1038, 1050-
1051 n.15 (11th Cir. 1992), affg. 95 T.C. 525 (1990);
Zinniel v. Commissioner, 89 T.C. 357, 367 (1987), affd. 883
F.2d 1350 (7th Cir. 1989);8 see also Livingston, supra at 93
(“The Blue Book is on especially weak ground when it adopts
anti-taxpayer positions not taken in the committee
reports.”). Given the clear thrust of the conference
committee report, the General Explanation is without
foundation and must fall by the wayside. To conclude other-
wise would elevate it to a status and accord it a deference
to which it is simply not entitled.
__________________
7 In this connection, we also note that the Tax Reform Act
of 1986, Pub. L. 99-514, 100 Stat. 2085, was enacted on Oct.
22, 1986, during the 99th Congress, whereas the General
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