The IRA has acquiesced to the 9th Circuit decision in Voss vs Commissioner that the mortgage interest deduction is by taxpayer, not by residence.
Information is here at Paul Caron's blog:
I'm surprised that the IRS took the position it did. On the $250,000 homeowner exclusion the IRS has ruled that is by taxpayer rather than by residence. Why wouldn't they think this would be the same?
All we know is that the IRS acquiesced. This means that they neither agreed nor disagreed with the circuit courts reasoning used for its decision. It does mean that they will follow the decision in cases that have the same facts. In other words, the limitation on deducting qualified mortgage interest should be applied on a per taxpayer basis not a per residence basis. The statute is clear that married individuals are limited to the same amount whether they file a joint return or separate returns. Unmarried individuals who own the same home are entitled to the same limit. The circuit court agrees that this creates a marriage penalty and they said so what.
I think the most telling part of the circuit court decision is their reasoning on the use of the parenthetical when it came to how married taxpayers should be treated. If the limit applied per residence, why would Congress have to create the parenthetical that said married individuals filing separate returns only have half the limit!
Perhaps that case is yet to be tried.
It means that they will follow the decision in the same circuit that issued the ruling. They often take different positions in different federal circuits, until several appeals courts all agree, or until the Supreme Court steps in.
Yes, that is one of the (often overlooked) rules of statutory construction.
In the $250,000 exemption situation, the rules of construction tend to go the other way. Because in that situation the statute allows a double exemption for a married couple. Why would they have needed to do that if the exemption were to be applied on a per person basis rather than a per residence basis?
On the other hand, the statute also gives the double deduction to married couples where only one has satisfied the ownership requirement, so it's not necessarily fatal to the "per person" approach.
You have it backwards Stuart. When they acquiesce to a Circuit Court opinion they are agreeing to follow the decision in all circuits. When they nonacquiesce to a Circuit Court opinion they are not agreeing to follow the decision in the other circuits.
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OK, you're right. Sorry.
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