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our decision in Lychuk) in litigating the deductibility of the
loan origination/acquisition costs. Therefore, those cases do
not require us to decide that respondent was not substantially
justified in seeking to capitalize those costs.
D. Controlling Effect of Rev. Rul. 99-23, the ANPRM,
Announcement 2002-9, and U.S. Freightways Corp.
1. Rev. Rul. 99-23
Petitioners argue that respondent’s issuance of Rev. Rul.
99-23, 1999-1 C.B. 998, and his concession based on that ruling
in Wells Fargo & Co. and Subs. v. Commissioner, supra, of the
deductibility of the costs attributable to the “investigatory
stage” of the transaction results in a presumption under section
7430(c)(4)(B)(ii) of no substantial justification for
respondent’s litigating position with respect to the loan
origination/acquisition costs.
As noted supra note 11, Rev. Rul. 99-23, 1999-1 C.B. at
1000, classifies as an expense eligible for amortization as a
startup expenditure under section 195 (and, in the context of a
business expansion, as a deductible expense) “investigatory
costs” that are “paid or incurred in order to determine whether
to enter a new business and which new business to enter”.
Although there is an undeniable similarity between the
“investigatory costs” described in Rev. Rul. 99-23, supra, as
eligible for amortization under section 195 and the credit
analysis activities performed by ACC’s employees preparatory to
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