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absurd results. Green v. Bock Laundry Mach. Co., 490 U.S. 504,
509 (1989); Idahoan Fresh v. Advantage Produce, Inc., 157 F.3d
197, 202 (3d Cir. 1998); Gen. Dynamics Corp. v. Commissioner, 108
T.C. 107, 121 (1997). As the Court of Appeals for the Third
Circuit has explained:
Where the statutory language is plain and unambiguous,
further inquiry is not required, except in the
extraordinary case where a literal reading of the
language produces an absurd result. * * * [Idahoan
Fresh v. Advantage Produce, Inc., supra at 202.]
Recently, in Trigon Ins. Co. v. United States, 215 F. Supp.
2d 687 (E.D. Va. 2002), supplemented at 234 F. Supp. 2d 581 (E.D.
Va. 2002), the precise legal question before us as to the
interpretation of TRA 1986 section 1012(c)(3)(A)(ii) and its
application to Blue Cross Blue Shield organizations was
addressed. Trigon Ins. Co. also involved claimed loss deductions
under section 165 relating to the termination of health insurance
group contracts that were in effect on January 1, 1987. The
District Court agreed with the taxpayer (and with petitioner’s
legal position herein) that the language of TRA 1986 section
1012(c)(3)(A)(ii) was clear and unambiguous and therefore that,
in spite of the limiting language in the legislative history, the
statutory basis step-up provision was not limited to gains or
losses realized only on sale or exchange transactions, and the
basis step-up generally was applicable to the group contracts
terminated in each year. The District Court explained as
follows:
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