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regulations, did not undergo any public review or comment before
its issuance.
In accordance with the analysis under United States v. Mead
Corp., 533 U.S. 218 (2001), we decline to adopt the exception set
forth in Rev. Rul. 90-44, supra. First, as we have discussed,
the exception does not properly interpret the text of the
statutes as written. See Commissioner v. Schleier, 515 U.S. 323,
336 n.8 (1995). Second, we find in the ruling neither adequate
“thoroughness evident in its consideration” nor adequate
“reasoning” as to the presence of the exception in the statutes.
See Skidmore v. Swift & Co., supra at 140. The ruling simply
states that the exception was included in the revenue ruling “in
order to fulfill the congressional purpose underlying section
265(b)” and may be invoked “to clearly reflect the income of the
financial institution and to prevent the evasion or avoidance of
taxes”. Rev. Rul. 90-44, 1990-1 C.B. at 57. Third, the revenue
ruling was issued many years after the enactment of the relevant
statutes, approximately 8 years after the enactment of section
291(a)(3) and (e)(1)(B) and 4 years after the enactment of
section 265(b).
We hold that the numerator does not include the tax-exempt
obligations purchased and owned by Investments and sustain
petitioner’s reporting position. We have considered all of the
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