- 97 -
regulations were promulgated pursuant to the Commissioner’s
section 7805(a) general power to promulgate interpretative
regulations. An interpretative regulation warrants less
deference than legislative regulation. United States v. Vogel
Fertilizer Co., 455 U.S. 16, 24 (1982). Congress did grant the
Commissioner the power to enact legislative regulations with
respect to some provisions of section 163, but not with regard to
section 163(h)(2)(A).3 The Commissioner has not promulgated
permanent regulations despite the fact that this temporary
regulation was first promulgated in 1987.
Finally, the majority’s validation of section 1.163-
9T(b)(2)(I)(A), Temporary Income Tax Regs., supra, begs a
significant policy question, and that is whether Congress ever
intended to deny individuals doing business through sole
proprietorships the advantages they would enjoy had they engaged
as a corporate form. See Redlark v. Commissioner, 106 T.C. 31,
40-41 (1996). In the year before 1986 TRA was enacted, there
were 11,928,738 nonfarm sole proprietorship returns filed with
the Internal Revenue Service,4 and as of 1999, there were
17,575,643 nonfarm sole proprietorship returns filed with the
3See Judge Swift’s dissent pp. 103-104 and see generally
Judge Vasquez’s dissent.
4Statistics of Income Bulletin, Vol. 20, no. 1, from table
10.–Nonfarm sole proprietorship returns: selected income
statement items for specified income years, 1980-1998, Summer
2000.
Page: Previous 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 NextLast modified: May 25, 2011