Ezel / IRS Rulings / 201145017

Advice favored disallowing a deduction claim despite Ninth Circuit location

Number
201145017
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Trade or Business (Deductible v. Not Deductible)
Topics
Income and deductions
Code sections
§ 162, § 6110
Ruling dated
August 3, 2011
Publicly released
November 10, 2011
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2011, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2011
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel's Office advice concerned a deduction claim under IRC § 162. The author said the claim should be disallowed even though the matter was in the Ninth Circuit, because the Service viewed Boise as incorrect and relied on cases from the Third and Eighth Circuits. The author also sought input from two other people before finalizing the discussion. The memo does not identify the underlying taxpayer or provide more facts about the deduction.

Ruling snapshot

  • Question: Should the deduction claim be disallowed despite the case being in the Ninth Circuit?
  • Outcome: Advice given.
  • Key authorities: IRC § 162; CC 2004-38; Boise; cases from the Third and Eighth Circuits; 26 U.S.C. § 6110(k)(3)

Full text (IRS public release)

ID: CCA_2011080315271848 Number: 201145017
Release Date: 11/10/2011
Office: --------------
UILC: 162.00-00

From: -------------------
Sent: Wednesday, August 03, 2011 3:27:23 PM
To: ------------------------
Cc: ----------------------------------
Subject: FW: 404k deduction

-----------

I apologize for not getting back to you sooner. I finally read CC 2004-38 again and I think that we should disallow the claim. Even though it is in the 9th Circuit, Service position is that Boise is incorrect and the cases we won in the 3rd and 8th Circuits support that view. I would also like to include ------- and ------- in the discussion; therefore, I am copying them so that they can weigh in. I don't know if they agree with me. Thanks.

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