- 39 -
(applicable to the professional fees) was the promulgation of
section 1.263(a)-4(f)(1), Income Tax Regs., as part of the final
INDOPCO regulations, effective December 31, 2003.15 Respondent’s
concession with respect to the deductibility of the professional
fees was obviously timely as it preceded respondent’s adoption of
the 12-month rule. The only remaining issue is whether
respondent’s April 19, 2002, concession with respect to the
deductibility of the loan origination/acquisition costs was
timely.
Respondent’s concession with respect to the deductibility of
the loan origination/acquisition costs occurred 1 month and 4
days after issuance of CCN 2002-21. Respondent argues that “he
should be allowed a reasonable period of time, following his
change in position * * * to concede * * * [the deductibility of
the loan origination/acquisition costs] in pending cases”, and
that the slightly more than 1 month between the issuance of CCN
2002-21 and his concession is reasonable. We agree.
15 The 12-month rule was also contained in the proposed
regulations issued on Dec. 19, 2002. Although proposed
regulations do not constitute “applicable published guidance”
under sec. 7430(c)(4)(B)(ii) and (iv), we have considered them as
representing respondent’s position on an issue (but lacking the
effect of law). See, e.g., F.W. Woolworth Co. v. Commissioner,
54 T.C. 1233, 1265-1266 (1970); Allen v. Commissioner, T.C. Memo.
1988-166 n.44. We are not at this time required to decide
whether proposed regulations constitute a position against which
respondent may not litigate, consistent with the rationale of
Rauenhorst v. Commissioner, 119 T.C. 157, 170-173 (2002), because
the proposed INDOPCO regulations, like the final regulations,
postdate respondent’s concessions in the consolidated cases.
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