Duquesne Light Holdings, Inc. & Subsidiaries v. Commissioner of Internal Revenue

In Charles Ilfeld Co. v. Hernandez, this Court stated that “[i]n the absence of a provision of the [Revenue] Act definitely requiring” what amounts to “the practical equivalent of double deduction,” such a purpose “will not be attributed to lawmakers.” 292 U.S. 62, 68 (1934). Some courts of appeals treat Ilfeld as establishing only a canon of statutory interpretation. But others, including the Third Circuit here, read Ilfeld to authorize the Internal Revenue Service to disregard even unambiguous statutory and regulatory provisions unless those provisions expressly provide that a taxpayer is entitled to a duplicative tax benefit. The question presented is: When unambiguous statutory or regulatory provisions authorize a taxpayer to take two deductions for the same economic loss, may the IRS nonetheless disallow one of the authorized deductions unless the provisions also expressly state that taxpayers are entitled to duplicative benefits?