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ACC’s purchase of any installment contract, we find that
respondent’s refusal to concede the deductibility of the loan
origination/acquisition costs in light of Rev. Rul. 99-23, supra
was substantially justified.
Respondent does not address the relevance of Rev. Rul. 99-
23, 1999-1 C.B. 998, to the deductibility of the loan
origination/acquisition costs in his objection to the motions.
He does, however, address the applicability of that ruling to
costs incurred in connection with the acquisition of credit card
receivables in an IRS field service advice memorandum to the
Associate Area Counsel (LMSB), Philadelphia (Field Service Advice
200136010 (Sept. 7, 2001)) (the FSA), which we assume expresses
respondent’s position on that issue.14 The costs in question are
described as “expenses of determining whether to acquire certain
loans, and which loans to acquire”, a description that resembles
the credit analysis activities of ACC’s employees. In the FSA,
respondent concludes that “no expression of congressional intent,
and neither * * * [section] 195 nor its legislative history,
suggest [sic] that costs of investigating the acquisition of a
specific capital asset are currently deductible”. Respondent
concludes that “the holdings in Rev. Rul. 99-23 are not
14 Although they have no precedential status, field service
advice memoranda may be cited as an expression of the
Commissioner’s position. See Rhone-Poulenc Surfactants &
Specialities, L.P. v. Commissioner, 114 T.C. 533, 543 (2000),
appeal dismissed and remanded 249 F.3d 175 (3d Cir. 2001).
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