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The majority argues that the use of the term “deficiencies”
in the Conference Committee Report may be unclear and that
“generally” only excludes certain types of estate taxes from
“personal interest”. Majority op. pp. 33-34. The effect of
these arguments is to restrain the force of the Conference
Committee Report in determining the reach of what is “properly
allocable” to a trade or business.
The term deficiency means “the amount by which the income,
gift, or estate tax due under the law exceeds the amount of such
tax shown on the return.” Bregin v. Commissioner, 74 T.C. 1097,
1101-1102 (1980). The plain language of the Conference Committee
Report supports petitioners because it excepts from personal
interest “interest incurred or continued in connection with the
conduct of a trade or business.” H. Conf. Rept. 99-841, at II-
154, supra, 1986-3 C.B. (Vol. 4) at 154. The interest was
incurred as a result of a tax deficiency arising from the
operation of a sole proprietorship. The final sentence in the
above passage does not detract from this reading. “Generally” is
defined as “in disregard of specific instances and with regard to
an overall picture.” Webster’s Tenth Collegiate Dictionary 485
(1998). The use of the term “generally” indicates that the
conference committee understood that personal interest usually
includes interest on tax deficiencies; however, there are
exceptions to this rule. A reasonable inference would be that
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