FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRUCE H. VOSS,

Petitioner-Appellant,

v.

COMMISSIONER OF INTERNAL

REVENUE,

Respondent-Appellee.

No. 12-73257

Tax Ct. No.

16443-09

CHARLES J. SOPHY,

Petitioner-Appellant,

v.

COMMISSIONER OF INTERNAL

REVENUE,

Respondent-Appellee.

No. 12-73261

Tax Ct. No.

16421-09

OPINION

Appeal from a Decision of the

United States Tax Court

Argued and Submitted

February 5, 2015—Pasadena, California

Filed August 7, 2015
2 VOSS V. CIR

Before: Michael J. Melloy,

*

 Jay S. Bybee,

and Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Bybee;

Dissent by Judge Ikuta

SUMMARY**

Tax

The panel reversed a Tax Court decision involving the

debt limit provisions for unmarried co-owners seeking to

deduct mortgage interest for their qualified residence.

The panel held that the debt limit provisions of 26 U.S.C.

§ 163(h)(3) apply on a per-taxpayer basis to unmarried coowners of a qualified residence. The panel remanded for

determination of the proper amount of interest that taxpayers

are entitled to deduct.

Dissenting, Judge Ikuta would defer to the Internal

Revenue Service’s reasonable interpretation of an

ambiguous statute, which interpretation would limit

unmarried taxpayers in this situation to deducting the same

amount as married taxpayers filing jointly.

* The Honorable Michael J. Melloy, Senior Circuit Judge for the U.S.

Court of Appeals for the Eighth Circuit, sitting by designation.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
VOSS V. CIR 3

COUNSEL

Emily J. Kingston (argued), Sideman & Bancroft LLP, San

Francisco, California; AubreyHone, Hone Maxwell LLP, San

Francisco, California, for Petitioners-Appellants.

Kathryn Keneally, Assistant Attorney General; Jonathan S.

Cohen, John Schumann (argued), Attorneys, United States

Department of Justice, Tax Division, Washington, D.C., for

Respondent-Appellee.

Shannon P. Minter, Christopher F. Stoll, National Center for

Lesbian Rights, San Francisco, California, for Amici Curiae

Professors of Law.

OPINION

BYBEE, Circuit Judge:

This is a tax dispute brought by two unmarried co-owners

of real property, Bruce Voss and Charles Sophy. For the

2006 and 2007 tax years, Voss and Sophy each claimed a

home mortgage interest deduction under § 163(h)(3) of the

Internal Revenue Code, which allows taxpayers to deduct

interest on up to $1 million of home acquisition debt and

$100,000 of home equity debt. After an audit, the IRS

determined that Voss and Sophy were jointly subject to

§ 163(h)(3)’s $1 million and $100,000 debt limits and thus

disallowed a substantial portion of their claimed deductions. 

Voss and Sophy challenged the IRS’s assessment in Tax

Court, arguing that the statute’s debt limits apply per taxpayer

such that they were entitled to deduct interest on up to $1.1
4 VOSS V. CIR

million of home debt each. The Tax Court agreed with the

IRS.

We are now called upon to decide how § 163(h)(3)’s debt

limit provisions apply when two or more unmarried coowners of a residence claim the home mortgage interest

deduction. Although the statute is silent as to unmarried coowners, we infer from the statute’s treatment of married

individuals filing separate returns that § 163(h)(3)’s debt

limits apply to unmarried co-owners on a per-taxpayer basis. 

We accordingly reverse the decision of the Tax Court and

remand for a recalculation of petitioners’ tax liability.

I

Section 163 of the Internal Revenue Code governs the

deductibility of interest on a taxpayer’s indebtedness. This

section of the Tax Code, like much of the Code, is

complex—it requires attention to definitions within

definitions and exceptions upon exceptions. To assist the

reader, we begin with a brief overview of the section’s

relevant provisions.

Section 163 begins with the general rule that interest on

indebtedness is deductible. See 26 U.S.C. § 163(a). 

Subsection (h), however, provides that, “[i]n the case of a

taxpayer other than a corporation,” personal interest is not

deductible. See id. § 163(h)(1) (“In the case of a taxpayer

other than a corporation, no deduction shall be allowed under

this chapter for personal interest paid or accrued during the

taxable year.”). Nevertheless, “personal interest” is defined

rather technically as “any interest allowable as a deduction

. . . other than” certain specified categories of interest. See id.

§ 163(h)(2). One of those carved-out categories is “any
VOSS V. CIR 5

qualified residence interest (within the meaning of paragraph

(3)).” Id. § 163(h)(2)(D).

Section 163(h)(3) thus provides that interest on a

“qualified residence” is not “personal interest” and,

accordingly, may be deducted by taxpayers who are not

corporations. The Code defines “qualified residence” as the

taxpayer’s principal residence and “1 other residence of the

taxpayer which is selected by the taxpayer for purposes of

this subsection for the taxable year and which is used by the

taxpayer as a residence.” Id. § 163(h)(4)(A)(i).

“Qualified residence interest” encompasses interest

payments on two types of debt: acquisition indebtedness and

home equity indebtedness. Id. § 163(h)(3)(A). “Acquisition

indebtedness” generally means debt incurred in, or that

results from the refinancing of debt incurred in, “acquiring,

constructing, or substantially improving” a qualified

residence. Id. § 163(h)(3)(B)(i). “Home equity

indebtedness” generally means indebtedness, other than

acquisition indebtedness, that is secured by a qualified

residence and that does not exceed the difference between the

amount of acquisition indebtedness and the home’s fair

market value. Id. § 163(h)(3)(C)(i). A home equity line of

credit is a typical example of home equity indebtedness. So,

for example, if a taxpayer has a purchase money mortgage (or

the refinancing of such a mortgage) on both a primary home

and a summer home, she can deduct interest payments on

both mortgages. She may also deduct the interest on any

home equity line of credit on both residences.

Significantly, the statute does not allow taxpayers to

deduct interest payments on an unlimited amount of

acquisition and home equity indebtedness. Instead, the
6 VOSS V. CIR

statute limits “[t]he aggregate amount treated as acquisition

indebtedness for any period” to $1,000,000 and “[t]he

aggregate amount treated as home equity indebtedness for

any period” to $100,000. Id. § 163(h)(3)(B)(ii), (C)(ii). “[I]n

the case of a married individual filing a separate return,”

however, the statute reduces the debt limits to $500,000 and

$50,000. Id. We shall refer to these provisions as the debt

limit provisions.

If a taxpayer’s total mortgage debt exceeds the debt

limits, a Treasuryregulation, 26 C.F.R. § 1.163-10T, provides

the method for calculating qualified residence interest. 

Subsection (e) of that regulation sets out the usual method:

qualified residence interest is calculated by multiplying the

total interest paid by the ratio of the applicable debt limit over

the total debt. See id. § 1.163-10T(e). For example, if a

single individual has a $2 million mortgage and a $200,000

home equity line of credit, the ratio is 50%: $1.1 million (the

total applicable debt limit under the statute) over $2.2 million

(the total debt). Thus, the taxpayer is entitled to deduct 50%

of whatever interest is paid or accrued during her taxable

year.1

In sum, under § 163 and the applicable Treasury

regulation, a taxpayer may deduct the interest paid on a

mortgage or home equity line of credit for a principal

residence and a second home. For taxpayers other than

married individuals filing a separate return, the deduction is

limited to interest paid on $1 million of mortgage debt and

$100,000 of home equity debt. If the taxpayer’s home

indebtedness exceeds $1.1 million, then she is entitled to

1 The regulation is silent as to how the deduction should be calculated

in co-owner situations.
VOSS V. CIR 7

deduct a portion of her interest, determined by the ratio of the

statutory debt limit divided by her total actual debt. If the

taxpayer is married filing a separate return, the debt limit is

$550,000.

Although the statute is specific with respect to a married

taxpayer filing a separate return, the Code does not specify

whether, in the case of residence co-owners who are not

married, the debt limits apply per residence or per taxpayer. 

That is, is the $1.1 million debt limit the limit on the qualified

residence, irrespective of the number of owners, or is it the

limit on the debt that can be claimed by any individual

taxpayer? That gap in the Code is the source of the present

controversy.

II

A

Bruce Voss and Charles Sophy are domestic partners

registered with the State of California. They co-own two

homes as joint tenants—one in Rancho Mirage, California

and the other, their primary residence, in Beverly Hills,

California.

When Voss and Sophy purchased the Rancho Mirage

home in 2000, they took out a $486,300 mortgage, secured by

the property. Two years later, they refinanced that mortgage

and obtained a new mortgage, also secured by the property,

in the amount of $500,000. Voss and Sophy are jointly and

severally liable for the refinanced Rancho Mirage mortgage.

Voss and Sophy purchased the Beverly Hills home in

2002. They financed the purchase of the Beverly Hills home
8 VOSS V. CIR

with a $2,240,000 mortgage, secured by the Beverly Hills

property. About a year later, they refinanced the mortgage by

obtaining a new loan in the amount of $2,000,000. Voss and

Sophy are jointly and severally liable for the refinanced

Beverly Hills mortgage, which, like the original mortgage, is

secured by the Beverly Hills property. At the same time as

they refinanced the Beverly Hills mortgage, Voss and Sophy

also obtained a home equity line of credit of $300,000 for the

Beverly Hills home. Voss and Sophy are jointly and

severally liable for the home equity line of credit as well.

The total average balance of the two mortgages and the

line of credit in 2006 and 2007 (the two taxable years at

issue) was about $2.7 million—$2,703,568.05 in 2006 and

$2,669,135.57 in 2007. Thus, whether § 163(h)(3)’s debt

limit provisions are interpreted as applying per taxpayer (such

that Voss and Sophy can deduct interest on up to $2.2 million

of debt) or per residence (such that Voss and Sophy can

deduct interest on up to $1.1 million of debt), it is in either

event clear that Voss and Sophy’s debt exceeds the statutory

debt limits.

B

Voss and Sophy each filed separate federal income tax

returns for taxable years 2006 and 2007. In their respective

returns, Voss and Sophy each claimed home mortgage

interest deductions for interest paid on the two mortgages and

the home equity line of credit. The parties agree on the

amounts of interest Voss and Sophy each paid for those years:

Voss paid $85,962.30 in 2006 and $76,635.08 in 2007, and

Sophy paid $94,698.33 in 2006 and $99,901.35 in 2007. The

total interest paid was $180,660.63 in 2006 and $176,536.43

in 2007.
VOSS V. CIR 9

On their respective 2006 returns, Voss and Sophy each

claimed a home mortgage interest deduction of $95,396, for

a total of $190,792. Voss and Sophy now agree that this was

at least $10,131.37 too much because Voss and Sophy

together only paid $180,660.63 in interest that year. The

additional amount represents interest that Voss paid on

December 31, 2005, and was thus not deductible by either

Voss or Sophy for taxable year 2006. For taxable year 2007,

Voss and Sophy claimed less mortgage interest than they

actually paid—Voss claimed a deduction of $88,268, and

Sophy claimed a deduction of $65,614.

The IRS audited the 2006 and 2007 returns and, in 2009,

assessed notices of deficiency to Voss and Sophy. The IRS

calculated each petitioner’s mortgage interest deduction by

applying a limitation ratio to the total amount of mortgage

interest that each petitioner paid in each taxable year. The

limitation ratio was the same for both Voss and Sophy: $1.1

million ($1 million of home acquisition debt plus $100,000 of

home equity debt) over the entire average balance, for each

taxable year, on the BeverlyHills mortgage, the BeverlyHills

home equity line of credit, and the Rancho Mirage mortgage.

Using that method, the IRS concluded that Voss was

allowed to deduct $34,975 in 2006 and $31,583 in 2007. The

IRS thus disallowed $60,421 of Voss’s claimed deduction in

2006 and $56,685 of his claimed deduction in 2007. The IRS

also found Sophy’s returns deficient. The IRS concluded that

Sophy was allowed to deduct $38,530 in 2006 and $41,171 in

2007. The IRS thus disallowed $56,866 of Sophy’s claimed

deduction in 2006 and $24,443 of his claimed deduction in

2007.
10 VOSS V. CIR

C

Voss and Sophy each filed a petition with the Tax Court,

and the two cases were consolidated for joint consideration. 

The Tax Court granted the parties’ joint motion to submit the

cases for decision without trial and on the basis of stipulated

facts and exhibits, and directed the parties to submit proposed

computations for entry of decision.

Based on the stipulated facts, exhibits, and proposed

computations submitted by the parties, the Tax Court reached

a decision and issued an opinion in the IRS’s favor. The Tax

Court framed the question presented as “whether the statutory

limitations on the amount of acquisition and home equity

indebtedness with respect to which interest is deductible

under section 163(h)(3) are properly applied on a perresidence or per-taxpayer basis when residence co-owners are

not married to each other.” Sophy v. Comm’r, 138 T.C. 204,

209 (2012).

The Tax Court began its analysis by looking to the

definitions of acquisition indebtedness and home equity

indebtedness in § 163(h)(3)(B)(i) and (C)(i).2Id. at 210. The

Tax Court noted that the term “any indebtedness” in both

definitions is not qualified by language relating to an

2

 “Acquisition indebtedness” is defined as “any indebtedness which (I)

is incurred in acquiring, constructing, or substantially improving any

qualified residence of the taxpayer, and (II) is secured by such residence.” 

26 U.S.C. § 163(h)(3)(B)(i). “Home equity indebtedness” is defined as

“any indebtedness (other than acquisition indebtedness) secured by a

qualified residence to the extent the aggregate amount of such

indebtedness does not exceed (I) the fair market value of such qualified

residence, reduced by (II) the amount of acquisition indebtedness with

respect to such residence.” Id. § 163(h)(3)(C)(i).
VOSS V. CIR 11

individual taxpayer (as in “any indebtedness of the

taxpayer”). Id. The Tax Court also pointed out that the

phrase “of the taxpayer” in the definition of acquisition

indebtedness “is used only in relation to the qualified

residence [as in “qualified residence of the taxpayer”], not the

indebtedness.” Id.

The Tax Court then examined the definition of qualified

residence interest.3

 Id. The Tax Court noted that the phrase

“with respect to any qualified residence” in that definition

appeared to be superfluous, as acquisition indebtedness and

home equity indebtedness were already defined in relation to

a qualified residence. Id. at 211. The Tax Court nevertheless

found that the phrase was not superfluous because, in its

view, “Congress used these repeated references to emphasize

the point that qualified residence interest and the related

indebtedness limitations are residence focused rather than

taxpayer focused.” Id. at 212.

The Tax Court further reasoned that the married-person

parentheticals were consistent with its per-residence

interpretation, as the parentheticals made clear that married

couples—whether filing separately or jointly—are, as a

couple, limited to deducting interest on $1 million of

acquisition indebtedness and $100,000 of home equity

indebtedness. Id. The purpose of the parentheticals, the Tax

Court explained, was simply

3

“Qualified residence interest” is defined as “any interest which is paid

or accrued during the taxable year on . . . acquisition indebtedness [or

home equity indebtedness] with respect to any qualified residence of the

taxpayer.” Id. § 163(h)(3)(A).
12 VOSS V. CIR

to set out a specific allocation of the limitation

amounts that must be used bymarried couples

filing separate tax returns, thus implying that

co-owners who are not married to one another

may choose to allocate limitation amounts

among themselves in some other manner,

such as according to percentage of ownership.

Id. at 213.

Noting that nothing in the legislative history of

§ 163(h)(3) suggested any contrary intention, the Tax Court

concluded that “the limitations in section 163(h)(3)(B)(ii) and

(C)(ii) on the amounts that may be treated as acquisition and

home equity indebtedness with respect to a qualified

residence are properly applied on a per-residence basis.” Id.

We have jurisdiction to review the decisions of the Tax

Court “in the same manner and to the same extent as

decisions of the district courts in civil actions tried without a

jury.” 26 U.S.C. § 7482(a)(1). Accordingly, we review the

Tax Court’s factual findings for clear error, and we review

the Tax Court’s conclusions of law—including its

interpretation of the Internal Revenue Code—de novo. 

Suzy’s Zoo v. Comm’r, 273 F.3d 875, 878 (9th Cir. 2001).

III

We are asked to decide an issue of first impression: 

When multiple unmarried taxpayers co-own a qualifying

residence, do the debt limit provisions found in 26 U.S.C.

§ 163(h)(3)(B)(ii) and (C)(ii) apply per taxpayer or per
VOSS V. CIR 13

residence? We conclude that § 163(h)’s debt limits apply per

taxpayer.4

A

We begin with the text of the key provisions at

issue—§ 163(h)(3)’s debt limit provisions. They provide:

(B) Acquisition indebtedness.—

. . .

(ii) $1,000,000 Limitation.—The

aggregate amount treated as acquisition

indebtedness for any period shall not exceed

$1,000,000 ($500,000 in the case of a married

individual filing a separate return).

(C) Home equity indebtedness.—

. . .

(ii) Limitation.—The aggregate amount

treated as home equity indebtedness for any

period shall not exceed $100,000 ($50,000 in

4 The parties agree that both of petitioners’ homes are qualified

residences under § 163(h)(4)(A)(i), that both refinancedmortgages qualify

as acquisition indebtedness under § 163(h)(3)(B)(i), and that petitioners’

home equity line of credit qualifies as home equity indebtedness under

§ 163(h)(3)(C)(i).
14 VOSS V. CIR

the case of a separate return by a married

individual).

Id. § 163(h)(3)(B)(ii), (C)(ii).

The parties dispute whether the $1 million and $100,000

debt limits in these provisions apply per taxpayer or per

residence. If they apply per taxpayer, then Voss and Sophy

are each entitled to a $1.1 million debt limit, such that

together they can deduct interest payments on up to $2.2

million of acquisition and home equity debt. If the debt limit

provisions apply per residence, as the Tax Court held, then

the $1 million and $100,000 debt limits must be divided up in

some way between Voss and Sophy.

Discerning an answer from § 163(h) requires considerable

effort on our part because the statute is silent as to how the

debt limits should apply in co-owner situations.5 Both

provisions limit “[t]he aggregate amount treated” as

acquisition or home equity debt, but neither says to whom or

what the limits apply. Had Congress wanted to make clear

that the debt limits apply per taxpayer, it could have drafted

the provisions to limit “the aggregate amount each taxpayer

may treat as” acquisition or home equity debt. But it did not. 

Or, had Congress wanted to make clear that the debt limits

apply per residence, it could have provided that the debt

limits must be divided or allocated in the event that two or

5 The relevant Treasury regulation, 26 C.F.R. § 1.163-10T, is also silent

in this regard. The regulation provides a method of calculating qualified

residence interest when the home debt exceeds the applicable debt limits

in the statute, see id. § 1.163-10T(e), but it says nothing about how

qualified residence interest should be calculated when there are multiple

co-owners, whether married or unmarried.
VOSS V. CIR 15

more unmarried individuals co-own a qualified residence. Cf.

26 U.S.C. § 36(a)(1)(C) (“If two or more individuals who are

not married purchase a principal residence, the amount of the

[first-time homebuyer] credit allowed . . . shall be allocated

among such individuals in such manner as the Secretary may

prescribe, except that the total amount of the credits allowed

to all such individuals shall not exceed $8,000”). But, again,

it did not.

Although Congress did neither of these things, we are not

altogether without textual guidance. The statute is mostly

silent about how to deal with co-ownership situations, but it

is not entirely silent. Both debt limit provisions contain a

parenthetical that speaks to one common situation of coownership: married individuals filing separate returns. See

id. § 163(h)(3)(B)(ii), (C)(ii). The parentheticals provide

half-sized debt limits “in the case of a married individual

filing a separate return.” Id.6 Congress’s use of the phrase

“in the case of” is important. It suggests, first, that the

parentheticals contain an exception to the general debt limit

set out in the main clause, not an illustration of how that

general debt limit should be applied. At the same time, the

phrase “in the case of” also suggests a certain parallelism

between the parenthetical and the main clause of each

provision: other than the debt limit amount, which differs, we

can expect that in all respects the case of a married individual

filing a separate return should be treated like any other case. 

It is thus appropriate to look to the parentheticals when

interpreting the main clauses’ general debt limit provisions. 

These parentheticals offer us at least three useful insights.

6 For no apparent reason that we can tell, (C)(ii)’s parenthetical is

worded differently. It states, “$50,000 in the case of a separate return by

a married individual.” 26 U.S.C. § 163(h)(3)(C)(ii) (emphasis added).
16 VOSS V. CIR

First, the parentheticals clearly speak in per-taxpayer

terms: the limit on acquisition indebtedness is “$500,000 in

the case of a married individual filing a separate return,” id.

§ 163(h)(3)(B)(ii) (emphasis added), and the limit on home

equity indebtedness is “$50,000 in the case of a separate

return by a married individual,” id. § 163(h)(3)(C)(ii)

(emphasis added). And they speak in such terms even though

married individuals commonly (and perhaps usually) co-own

their homes and are jointly and severally liable on any

mortgage debt. Had Congress wanted to draft the

parentheticals in per-residence terms, doing so would not

have been particularlydifficult. Congress could have written,

“in the case of any qualified residence of a married individual

filing a separate return.” Yet, once again, Congress did not

draft the statute in that way. The per-taxpayer wording of the

parentheticals, considered in light of the parentheticals’ use

of the phrase “in the case of,” thus suggests that the wording

of the main clause—in particular, the phrase “aggregate

amount treated”—should likewise be understood in a pertaxpayer manner.

Second, the parentheticals don’t justspeak in per-taxpayer

terms; they operate in a per-taxpayer manner. The

parentheticals give each separately filing spouse a separate

debt limit of $550,000 so that, together, the two spouses are

effectively entitled to a $1.1 million debt limit (the normal

limit for single taxpayers). They do not subject both spouses

jointly to the $550,000 debt limit specified in the statute. 

Were the parentheticals to work in that way, the result would

be quite anomalous. Rather than ensuring that a married

couple filing separate returns is treated the same as a couple

filing a joint return, the parentheticals, under a per-residence

reading, would result in disparate treatment of married

couples filing separate returns. The separately filing couple
VOSS V. CIR 17

would have a $550,000 debt limit, whereas the jointly filing

couple, and even the single individual, would have a $1.1

million debt limit.7

This is surely not what the statute intended, and we don’t

understand the Tax Court or the IRS to say otherwise. Quite

to the contrary, both acknowledge that the parentheticals’

lower limits apply per spouse—which is just another way of

saying per taxpayer. See Sophy, 138 T.C. at 212 (interpreting

the married-person parentheticals to mean that “married

taxpayers who file separate returns are limited to acquisition

indebtedness of $500,000 each” and “to home equity

indebtedness of $50,000 each” (emphasis added)); see also

Bronstein v. Comm’r, 138 T.C. 382, 386 (2012) (“[T]he

parenthetical indebtedness limitations of section

163(h)(3)(B)(ii) and (C)(ii) are $550,000 for each spouse

filing a separate return.” (emphasis added)). And if the debt

limits for spouses filing separately apply per spouse, we see

no reason in the statute why the debt limits for unmarried

individuals should not apply per unmarried individual.8 The

7

See Pau v. Comm’r, 73 T.C.M. (CCH) 1819, 1826 (1997) (holding that

a married couple filing a joint return can deduct “interest paid on $1

million of acquisition indebtedness”).

8 The dissent does not disagree with this logic. See Dissent at 46–47

(noting that if the married-person parenthetical were interpreted in a pertaxpayer manner, “married taxpayers filing separately would deduct the

same amount of interest as married taxpayers filing jointly”). Instead, the

dissent attacks our premise—i.e., that the married-person parenthetical

operates per taxpayer, not per residence. See id. at 47–49 (interpreting the

married-person parenthetical as imposing a “penalty on married

individuals for filing separately” by limiting separately filing spouses to

a combined debt limit of $550,000). As we have explained, however, the

dissent’s view runs contrary not only to the statute’s text (“in the case of
18 VOSS V. CIR

per-taxpayer operation of the debt limits for married

individuals filing separately thus suggests that the general

debt limits also operate per taxpayer.

Third, and finally, the very inclusion of the parentheticals

suggests that the debt limits apply per taxpayer. “It is a wellestablished rule of statutory construction that courts should

not interpret statutes in a way that renders a provision

superfluous.” Chubb Custom Ins. Co. v. Space Sys./Loral,

Inc., 710 F.3d 946, 966 (9th Cir. 2013), cert. denied, 134 S.

Ct. 906 (2014). If the $1.1 million debt limit truly applied per

residence, as the Tax Court held it does, the parentheticals

would be superfluous, as there would be no need to provide

that two spouses filing separately get $550,000 each. If the

$1.1 million debt limit applies per taxpayer, by contrast, the

parentheticals actually do something: they give each

separately filing spouse half the debt limit so that the

separately filing couple is, as a unit, subject to the same debt

limit as a jointly filing couple.

The Tax Court interpreted the married-person

parentheticals differently. The purpose of the parentheticals,

according to the Tax Court, is not to lower the debt limits for

spouses filing separate returns—the spouses are already

jointly subject to the $1.1 million debt limit. Rather, the Tax

Court explained,

this language simply appears to set out a

specific allocation of the limitation amounts

that must be used by married couples filing

separate tax returns, thus implying that coa married individual filing a separate return”) but also to the IRS’s own

uncontested interpretation of the statute.
VOSS V. CIR 19

owners who are not married to one another

may choose to allocate the limitation amounts

among themselves in some other manner,

such as according to percentage of ownership.

Sophy, 138 T.C. at 213 (emphasis added).

We find this interpretation unpersuasive. In particular, we

think it unlikely that Congress would go out of its way to

prevent spouses (and only spouses) from allocating

§ 163(h)(3)’s debt limit amounts, especially when in most

cases spouses presumably own their home as equal partners. 

The much more likely intent of the parentheticals, we think,

is to ensure that married couples filing a separate return are

treated the same, for purposes of § 163(h)(3), as married

couples filing a joint return—in other words, to ensure that all

married couples, not just joint filers, are treated as though

they were a single taxpayer.

Section 163(h)(3) is not the only provision in the Tax

Code that does this. Congress has on a number of occasions

provided half-sized deductions, credits, or limits for

separately filing spouses. See, e.g., 26 U.S.C. § 22(c)(2)(A)

(providing an initial credit of $7,500 to a qualifying married

couple filing jointly and “$3,750 in the case of a married

individual filing a separate return”), id. § 1202(b) (providing

that, for purposes of the Code’s exclusion for gain from

certain small business stock, the $10 million limitation on

eligible gain is reduced to $5 million “[i]n the case of a

separate return by a married individual”), id. § 1211(b)

(limiting allowable net capital losses to “$3,000 ($1,500 in

the case of a married individual filing a separate return)”).
20 VOSS V. CIR

The purpose of these provisions is obvious. In each

provision, each taxpayer gets some tax benefit—a credit, an

exclusion up to some limit, allowable losses up to some limit,

or, here, a deduction on interest on home debt up to some

limit. Congress, knowing that joint filers are treated as a

single taxpayer and that separate filers are treated as two

separate taxpayers, wants to ensure that the separately filing

spouses don’t get double the benefit that jointly filing couples

get. And so, in each of these provisions, Congress provides

that separately filing spouses each get half the benefit. The

intent of these provisions is not to prevent separately filing

spouses from allocating the benefit; it is to ensure that the

separately filing spouses don’t get double the credit, the

exclusion, the losses, or the debt limit that the jointly filing

couple gets.9

If Congress wants to go further and ensure that two or

more unmarried taxpayers are treated as a single taxpayer for

purposes of a particular deduction or credit, it can do that too. 

And it has. Take § 36 of the Tax Code, for example. That

section sets an $8,000 limit on the first-time homebuyer

credit but adds two caveats. See id. § 36(b)(1). The first

caveat is very similar to (and, indeed, has much of the same

language as) the limitation provisions here. The statute

states, “In the case of a married individual filing a separate

9 That said, Congress usually accomplishes this purpose by giving each

spouse half the tax benefit that the jointly filing couple gets. That may

mean that if a married couple has a large mortgage and files separate

returns, but only one spouse seeks the benefit, the couple may, all counted,

only get half the benefit it would have received had the couple filed

jointly. See, e.g., Bronstein, 138 T.C. at 384, 386 (holding that the clear

language of § 163(h)(3) limited a spouse filing a separate return to

$550,000 of debt even though she paid all of the mortgage interest and her

husband was unable to seek the deduction).
VOSS V. CIR 21

return, subparagraph (A) [the provision containing the $8,000

cap] shall be applied by substituting ‘$4,000’ for ‘$8,000.’” 

Id. § 36(b)(1)(B). But, unlike the limitation provisions here,

§ 36 does not stop there. It has an additional provision—the

second caveat—which states:

If two or more individuals who are not

married purchase a principal residence, the

amount of the credit allowed . . . shall be

allocated among such individuals in such

manner as the Secretarymay prescribe, except

that the total amount of the credits allowed to

all such individuals shall not exceed $8,000.

Id. § 36(b)(1)(C) (emphasis added).

As § 36 makes clear, Congress knows how to treat a

group of unmarried taxpayers as a single taxpayer for

purposes of a particular tax benefit or burden. Congress

could have done so here, but tellingly it did not. Instead,

Congress did what it has done many times before, using the

same language it has used before: It eliminated what would

otherwise be a significant discrepancy between separately

filing and jointly filing married couples by expressly reducing

the debt limits for spouses filing separately.

In sum, the married-person parentheticals’ language,

purpose, and operation all strongly suggest that § 163(h)(3)’s

debt limit provisions apply per taxpayer, not per residence. 

Absent some contrary indication in the statute, then, we shall

read the debt limit provisions as applying on a per-taxpayer

basis.
22 VOSS V. CIR

B

The Tax Court rejected a per-taxpayer reading of the debt

limit provisions because it discerned in § 163(h)(3) a general

“focus” on the qualified residence, Sophy, 138 T.C. at 210,

and a “conspicuous[] absen[ce]” of “any reference to an

individual taxpayer,” id. at 211. Because the debt limit

provisions do not speak directly to the situation of unmarried

co-owners, it was reasonable for the Tax Court to look

beyond those provisions in an effort to understand how the

provisions should be applied. Ultimately, however, these

other provisions of the statute do not sway us.

The Tax Court focused on three provisions in the statute,

all definitions: first, the definition of qualified residence

interest as “any interest which is paid or accrued during the

taxable year on[] acquisition [or home equity] indebtedness

with respect to any qualified residence of the taxpayer,” 26

U.S.C. § 163(h)(3)(A) (emphasis added); second, the,

definition of acquisition indebtedness as “any indebtedness

which[]is incurred in acquiring, constructing, or substantially

improving any qualified residence of the taxpayer,” id.

§ 163(h)(3)(B)(i) (emphasis added); and third, the definition

of home equity indebtedness as “any indebtedness (other than

acquisition indebtedness) secured by a qualified residence,”

id. § 163(h)(3)(C)(i) (emphasis added). Sophy, 138 T.C. at

210–11. In each definition, the Tax Court highlighted the

reference to the qualified residence and noted that the

taxpayer was only ever mentioned with respect to the

residence, not with respect to the indebtedness. Id.

We, however, do not find the statute’s focus on the

residence or lack of focus on the taxpayer particularly

compelling. As for the repeated references to the residence,
VOSS V. CIR 23

it is only natural that a statute providing a deduction on

“qualified residence interest” will focus on indebtedness with

respect to a qualified residence. Indeed, for the most part, the

statute’s references to the “qualified residence” are entirely

necessary; take those references out, and the statute would

change meaning or make little sense.

The Tax Court did identify a few instances where a

prepositional phrase involving the residence (such as “with

respect to any qualified residence”) could have been safely

omitted and was thus arguably superfluous, id. at 211–12, but

the same could be said of other prepositional phrases

involving the taxpayer (such as “of the taxpayer”).10

In all

likelihood, these phrases, though technically unnecessary,

were included simply to ease the reader’s understanding of a

complex tax statute full of technical definitions. (We

certainly appreciate their inclusion.) And, in any case, if

there is a plausible inference to be drawn from those few

stray prepositional phrases, it is overcome by the clear

implications of the married-person parentheticals discussed

above. Thus, in our view the statute’s focus on the residence

10 The statute’s definition of qualified residence interest is instructive. 

The statute defines that term to include interest on “acquisition

indebtedness with respect to any qualified residence of the taxpayer.” 26

U.S.C. § 163(h)(3)(A)(i) (emphasis added). As the TaxCourt pointed out,

Sophy, 138 T.C. at 211, the phrase “with respect to any qualified

residence” appears to be redundant because acquisition indebtedness is

defined as indebtedness “incurred in acquiring . . . any qualified residence

of the taxpayer,” 26 U.S.C. § 163(h)(3)(B)(i) (emphasis added). Notably,

however, the phrase “of the taxpayer” is also unnecessary because

qualified residence is defined as “the principal residence . . . of the

taxpayer” and “[one] other residence of the taxpayer.” Id.

§ 163(h)(4)(A)(i) (emphasis added). Indeed, “of the taxpayer” is twice

redundant: it is unnecessarily included in both the definition of qualified

residence interest and the definition of acquisition indebtedness.
24 VOSS V. CIR

says little about how the debt limit provisions should be

applied.

Nor do we find the occasional omission of the word

“taxpayer” particularly telling. To begin with, two of the

three definitions identified by the Tax Court do refer to the

taxpayer, and all three depend on the definition of “qualified

residence,” which itself refers to the taxpayer (for more on

the definition of “qualified residence,” see the next section

below). Setting to the side those references to the taxpayer,

it is true that the three definitions identified by the Tax

Court—just like the debt limit provisions in (h)(3)(B)(ii) and

(C)(ii)—do not specify who paid the interest, who incurred

the indebtedness, and whose indebtedness was secured by a

qualified residence. But when we look at the rest of § 163

(and, we suspect, the rest of the Tax Code), the omission of

the word “taxpayer” is anything but conspicuous. Note, for

example, how the word “taxpayer” is missing from the first

line of § 163, which states, “There shall be allowed as a

deduction all interest paid or accrued within the taxable year

on indebtedness.” Id. § 163(a). There is no need for the

sentence to say, “There shall be allowed as a deduction to the

taxpayer all interest paid by the taxpayer within the

taxpayer’staxable year on the taxpayer’sindebtedness.” Any

reasonable reader would understand that the statute is

speaking of a taxpayer.

Or take the first line of § 163(h). It states that “no

deduction shall be allowed under this chapter for personal

interest paid or accrued during the taxable year.” Id.

§ 163(h)(1). Again, the reader easily intuits that the statute

refers to a taxpayer’s deduction, a taxpayer’s personal interest

payments, and a taxpayer’s taxable year. Indeed, there can be

no doubt that is what (h)(1) means because the statement just
VOSS V. CIR 25

quoted follows the phrase, “In the case of a taxpayer other

than a corporation.” Id. (emphasis added).

Thus, although we do not fault the Tax Court for looking

to other provisions in the statute for guidance, we would

place little weight on the statute’s general focus on the

residence or its repeated omission of reference to the

taxpayer. If anything, these other provisions reinforce our

per-taxpayer reading; they reveal that the debt limit

provisions’ omission of the word “taxpayer” is actually quite

ordinary in the context of the broader statute.

C

Not only does nothing in the statute compel the Tax

Court’s per-residence reading; several of the statute’s

provisions point the other way. We have already noted one

example: by speaking and operating in a per-taxpayer

manner, the married-person parentheticals suggest that the

general debt limits also apply per taxpayer. Two other

provisions also warrant attention.

First, we are guided by the statute’s repeated references

to a single “taxable year.” Section 163(h) begins by stating

that “no deduction shall be allowed under this chapter for

personal interest paid or accrued during the taxable year.” Id.

§ 163(h)(1) (emphasis added). Likewise, § 163(h)(3) begins

by defining qualified residence interest as any interest on

acquisition or home equity debt “which is paid or accrued

during the taxable year.” Id. § 163(h)(3)(A). Indeed, the

very provisions at issue, the debt limit provisions, cap the

allowable amount of home debt “for any period”—the word

“period” clearly referring to the “taxable year” mentioned

earlier in (h)(3). Id. § 163(h)(3)(B)(ii), (C)(ii).
26 VOSS V. CIR

Residences do not have taxable years; only taxpayers do. 

And, importantly, taxpayers can have different taxable years. 

See 26 U.S.C. § 441(b) (providing that a taxpayer’s taxable

year may vary depending on the taxpayer’s annual accounting

period). Yet § 163(h) speaks in terms of a single taxable

year, thus implying that the debt limits apply per taxpayer. If

Congress truly intended to imply that § 163(h)(3)’s debt

limits apply per residence by broadly focusing on the

residence and consistently ignoring the taxpayer, it seems

unlikely to us that it would at the same time define qualified

residence interest with respect to a single taxable year.

Moreover, it is unclear how co-owners with different

taxable years could even determine “[t]he aggregate amount

treated as acquisition indebtedness for any period” under a

per-residence approach. Does one co-owner’s tax period

control? Or do the co-owners have to figure out some way of

accounting for both tax periods? (Keep in mind that

mortgage balances usually change monthly.) These difficult

questions go away, however, when the debt limits are read to

apply per taxpayer. Each co-owner simply determines the

interest paid and the average mortgage debt during his or her

own tax period.

The Tax Court’s per-residence reading is also hard to

square with the statute’s definition of “qualified residence.”

Somewhat counter-intuitively, the term “qualified residence”

can include one or two residences: “the principal residence

(within the meaning of section 121) of the taxpayer,” and “1

other residence of the taxpayer which is selected by the

taxpayer for purposes of this subsection for the taxable year

and which is used by the taxpayer as a residence (within the

meaning of section 280A(d)(1)).” Id. § 163(h)(4)(A)(i). 

Contrary to the Tax Court’s per-residence reading of the
VOSS V. CIR 27

statute, the term “qualified residence” clearly focuses on the

taxpayer. The term includes the principal residence “of the

taxpayer” and one other residence “of the taxpayer” that is

“used by the taxpayer as a residence” and is “selected by the

taxpayer.” Id. The term also specifies that the taxpayer may

select the secondary residence “for the taxable year,” id.,

suggesting that a taxpayer who owns multiple secondary

residences can change his or her “1 other residence” from one

tax year to the next.

More than just focusing on the taxpayer, the term

“qualified residence” also highlights the impracticality of the

Tax Court’s approach. As the term “qualified residence” is

defined, it is entirely possible that two residence co-owners

might each have a different “qualified residence.” For

example, two individuals might each have a separate primary

residence but go in together on a vacation home in Maui. For

such co-owners, filing tax returns under the Tax Court’s perresidence approach would be like running a three-legged race. 

The co-owners are tied together for one home but not the

other. This would mean that the two (or it could be three or

four) co-owners would have to coordinate their tax returns to

ensure that the aggregate amount of acquisition debt for each

taxpayer’s “qualified residence” does not exceed $1 million. 

It would also mean that one co-owner’s deduction might

depend on the size of another co-owner’s mortgage on a

home in which the first co-owner has no interest. Under a

per-taxpayer approach, by contrast, determining the amount

of acquisition debt is free of such difficulties. Each taxpayer

can calculate the deduction with reference to his or her

respective two residences.

These provisions—the married-person parentheticals, the

repeated references to the single “taxable year,” and the
28 VOSS V. CIR

taxpayer-specific definition of “qualified residence”—are at

odds with the Tax Court’s per-residence reading of

§ 163(h)(3). Each provision focuses on the individual

taxpayer, and the impracticality of applying the provisions

under a per-residence approach suggests that Congress never

intended that approach. We thus conclude that a per-taxpayer

reading of the statute’s debt limit provisions is most

consistent with § 163(h)(3) as a whole.11

IV

The IRS argues that applying § 163(h)(3)’s debt limit

provisions on a per-taxpayer basis creates a marriage penalty. 

We agree that it does, but we do not believe the marriage

penalty is as significant a concern as the IRS urges.

11 As the Treasury regulation’s formula set out in 26 C.F.R. § 1.163-

10T(e) only addresses the situation of a single taxpayer, the formula may

need to be adjusted to account for the situation of separately filing coowners, whether married or unmarried. See Dissent at 47 (suggesting that,

if married individuals filing separately are to receive the same combined

debt limit as a married couple filing jointly, the IRS would presumably

have to “allow [each] married taxpayer filing separately to deduct his or

her own interest payments on the debt in the proportion of $550,000

divided by one half of the total debt secured by the qualified residence”). 

We leave it to the IRS to develop in the first instance a workable

methodology for separately filing co-owners.

The dissent also disputes our conclusion that the regulation fails to

address the situation presented here, relying on the IRS’s conclusion “that

the regulation does apply to co-owners.” Dissent at 38 n.1 (citing IRS

CCA200911007, 2009 WL641772). But whether the IRS has interpreted

its own regulation in this manner is of little import where its reasoning for

doing so is a short-shrift interpretation of a statute in an opinion lacking

the force of law. See Maj. Op. at 31–32.
VOSS V. CIR 29

Congress may have had perfectly legitimate reasons for

distinguishing between married and unmarried taxpayers. 

Married individuals, unlike unmarried individuals, have the

option under the Tax Code of filing a joint return. This

option offers significant benefits—in particular, lower tax

rates at various levels of income. But it’s not all honeymoon;

filing jointly also comes with certain drawbacks. A couple

filing a joint return might, for example, receive one $1,000

tax credit where the same couple filing separate tax returns

might receive two $1,000 credits. It would appear that, in

Congress’s view, the home mortgage interest deduction is one

such drawback. If two individuals who are engaged to be

married each own their own house and each have their own

$1 million mortgage, both get to deduct all of their interest. 

But if they get married and file a joint return, they are treated

as one taxpayer and can then only deduct half of their interest. 

See Pau, 73 T.C.M. (CCH) at 1819, 1826. This is a marriage

penalty, but Congress presumably allows the marriage

penalty because the couple also receives offsetting benefits

available only to married couples filing a joint return.

Of course, a married couple filing separate returns does

not receive the benefits of filing a joint return. Is it unfair,

then, that they are treated as a single taxpayer while the

unmarried couple is not? Perhaps not, for the married couple,

unlike the unmarried couple, can usually elect to file a joint

return. And perhaps Congress did not want separately filing

married couples to have a significant advantage over jointly

filing married couples.

We have already explained that the apparent purpose of

the married-person parentheticals is to ensure that married

couples are treated as a single taxpayer for purposes of the

home mortgage interest deduction regardless of whether they
30 VOSS V. CIR

file separately or jointly. And the same purpose is evident in

other provisions as well. For example, the statute provides

that married couples filing separate returns generally “shall

be treated as 1 taxpayer” for purposes of the definition of

qualified residence. 26 U.S.C. § 163(h)(4)(A)(ii)(I). Like the

debt limit provisions, this provision does not explicitly say

whether the same is true of married couples filing a joint

return, but we can reasonably infer that Congress also

intended to treat jointly filing couples as a single taxpayer. 

See IRS Field Service Advisory No. 200137033 (Sept. 14,

2001) (opining, non-precedentially, that “[a]lthough

§ 163(h)(4)(A) does not specifically state that a married

couple filing jointly is treated as one taxpayer for purposes of

determining their mortgage interest deductions, we assume

that Congress did not intend to treat married couples filing

jointly differently than married couples filing separately”).

We thus agree that the debt limit provisions of § 163(h)(3)

result in a marriage penalty; but we are not particularly

troubled. Congress may very well have good reasons for

allowing that result, and, in any event, Congress clearly

singled out married couples for specific treatment when it

explicitly provided lower debt limits for married couples yet,

for whatever reason, did not similarly provide lower debt

limits for unmarried co-owners.

V

The dissent urges us to defer to the IRS’s interpretation of

the statute in a 2009 Chief Counsel Advice memorandum. 

Dissent at 43. The memorandum, like the Tax Court below,

adopts a per-residence interpretation of § 163(h)(3)’s debt

limit provisions. Its statutory analysis consists of one

paragraph, which reads:
VOSS V. CIR 31

Under § 163(h)(3)(B)(i), acquisition

indebtedness is defined, in relevant part, as

indebtedness incurred in acquiring a qualified

residence of the taxpayer—not as

indebtedness incurred in acquiring [a]

taxpayer’s portion of a qualified residence. 

The entire amount of indebtedness incurred

in acquiring the qualified residence

constitutes “acquisition indebtedness” under

§ 163(h)(3)(A)(i). . . . [U]nder

§ 163(h)(3)(B)(ii), the amount treated as

acquisition indebtedness for purposes of the

qualified residence interest deduction is

limited to $1,000,000 of total, “aggregate”

acquisition indebtedness. This is evident from

the parenthetical in § 163(h)(3)(B)(ii) which

limits the aggregate treated as acquisition

indebtedness to $500,000 for a married

taxpayer filing a separate return.

IRS Chief Counsel Advice No. 200911007, at 4 (Mar. 13,

2009).

As the dissent acknowledges, the IRS’s Chief Counsel

Advice is only entitled to the “measure of deference

proportional to the ‘thoroughness evident in its consideration,

the validity of its reasoning, its consistency with earlier and

later pronouncements, and all those factors which give it

power to persuade.’” Christopher v. SmithKline Beecham

Corp., 132 S. Ct. 2156, 2168–69 (2012) (quoting United

States v. Mead Corp., 533 U.S. 218, 228 (2001)); see also

Christensen v. Harris Cnty., 529 U.S. 576, 587 (2000)

(“Interpretations such as those . . . in policy statements,

agency manuals, and enforcement guidelines, all of which
32 VOSS V. CIR

lack the force of law—do not warrant Chevron-style

deference.”).

A review of these factors suggests the 2009 Chief

Counsel Advice should be given limited weight. To start, the

2009 Chief Counsel Advice is hardly thorough or

exhaustive—its analysis interpreting how the statute should

apply to unmarried co-owners consists of just one paragraph. 

It treats the question as one governed by the “plain language

of the statute,” IRS Chief Counsel Advice No. 200911007, at

4, yet as our exchange, the briefs of the parties, the Tax

Court’s decision, and the statute itself demonstrate, it is

anything but “plain.” The Chief Counsel Advice does not

grapple with the statute’s taxpayer-specific definition of

“qualified residence” or repeated references to a taxpayer’s

taxable year, nor does it explain how the married-person

parenthetical is anything but surplusage under a per-residence

reading of the statute.

As for consistency, the situation here is a far cry from that

in Hall v. United States, 132 S. Ct. 1882, 1890 (2012), a case

the dissent cites. See Dissent at 38 n.2. In Hall, the Supreme

Court “s[aw] no reason to depart from those established

understandings” of bankruptcy courts, bankruptcy

commentators, and the IRS’s consistent position for over a

decade in an IRS Chief Counsel Advice memorandum, the

Internal Revenue manual, and an IRS Litigation Guideline

Memorandum. See Hall, 132 S. Ct. at 1889–90. Here, by

contrast, there is no comparable consensus. Aside from the

IRS’s litigation position in this case, it appears that the 2009

Chief Counsel Advice—which is just six years old—is the

IRS’s onlypronouncement addressing how § 163(h)(3)’s debt
VOSS V. CIR 33

limits apply to unmarried co-owners.12 The agency’s

guidance is closer to a “mere[] . . . litigating position” than to

an “agency interpretation of ‘longstanding’ duration.” 

Dissent at 43 (quoting Alaska Dep’t of Envtl. Conservation v.

EPA, 540 U.S. 461, 487–88 (2004)).

Even putting all that aside, we are not persuaded by the

reasoning in the IRS’s 2009 guidance. The 2009 Chief

Counsel Advice reasons that “acquisition indebtedness” is

defined in the statute “as indebtedness incurred in acquiring

a qualified residence of the taxpayer—not as indebtedness

incurred in acquiring [a] taxpayer’s portion of a qualified

residence,” and concludes that unmarried co-owners are

“limited to $1,000,000 of total, ‘aggregate’ acquisition

indebtedness.” IRS Chief Counsel Advice No. 200911007,

at 4. But this begs the question. As we have explained,

although the statute limits “[t]he aggregate amount treated”

as acquisition or home equity debt, it does not say to whom

or what the limits apply.

Indeed, we are not convinced the dissent is fully

persuaded by the 2009 Chief Counsel Advice either. 

Although the dissent extols the IRS’s “reasonable and

persuasive” “position,” Dissent at 43, the dissent only briefly

discusses the Chief Counsel’s actual reasoning. And as for

the IRS’s arguments on appeal, the dissent shies away from

the IRS’s principal argument—i.e., that “the focus of the

12 Pointing to 26 C.F.R. § 1.163-10T(e), the dissent says “the IRS has

applied its expert interpretation of § 163(h) consistently for many years.” 

Dissent at 44. Yet the dissent does not dispute that § 1.163-10T(e) is

completely silent as to unmarried co-owners (or any co-owners, for that

matter). The 2009 Chief Counsel Advice is the one and only IRS

pronouncement on the issue before us.
34 VOSS V. CIR

statute is on the residence, not on the taxpayer.” We have

explained (in Part III.B) why this argument fails, yet the

dissent offers no response.

What is more, in one important respect, the dissent rejects

the IRS’s interpretation. According to the dissent, the

married-person parenthetical is not superfluous because it

imposes a “statutory penalty” on married individuals who

decide to file separately. Id. at 48. Under this view, two

unmarried co-owners are entitled to a total debt limit of $1.1

million, a married couple filing jointly is entitled to a total

debt limit of $1.1 million, and even a single individual is

entitled to a total debt limit of $1.1 million—but a married

couple filing separately is entitled to a total debt limit of

$550,000. See id. at 46–47.

To our knowledge, however, neither the IRS nor the Tax

Court has ever adopted the dissent’s interpretation. As the

IRS explained in its brief on appeal, “The parenthetical

language in the acquisition indebtedness limitation in

§ 163(h)(3)(B)(ii) provides that married taxpayers who file

separate returns are limited to acquisition indebtedness of

$500,000 each.” (Emphasis added.) Accord Sophy, 138 T.C.

at 212 (“[M]arried taxpayers who file separate returns are

limited to acquisition indebtedness of $500,000 each . . . .”

(emphasis added)); Bronstein, 138 T.C. at 386 (“[T]he

parenthetical indebtedness limitations . . . are $550,000 for

each spouse filing a separate return.” (emphasis added)); IRS

Chief Counsel Advice No. 200911007, at 4 (explaining that

the per-residence operation of the $1 million limit on

acquisition indebtedness “is evident from the [marriedperson] parenthetical,” thus implying that each separately

filing spouse gets a separate $500,000 aggregate debt limit). 
VOSS V. CIR 35

On this issue there is a consensus, and the dissent is on the

wrong side.

At bottom, although an IRS Chief Counsel Advice

statement “is helpful in determining the position of the IRS,”

it is an internal IRS memorandum prepared by an individual

IRS attorney. Wells Fargo & Co. v. United States, 119 Fed.

Cl. 27, 38 (2014). The document itself cautions that it “may

not be used or cited as precedent.” IRS Chief Counsel

Advice No. 200911007, at 1. Indeed, the IRS could issue a

memorandum taking the opposite position tomorrow,

“apparently without revoking the earlier guidance.” Wells

Fargo, 119 Fed. Cl. at 38 n.12.

Every factor the dissent says we should consider suggests

that the IRS’s interpretation should not be given significant

weight. Having considered the IRS’s reasoning as set out in

the 2009 Chief Counsel Advice and the IRS’s briefs on

appeal, we decline to adopt its interpretation.

VI

We hold that 26 U.S.C. § 163(h)(3)’s debt limit

provisions apply on a per-taxpayer basis to unmarried coowners of a qualified residence. We infer this conclusion

from the text of the statute: By expressly providing that

married individuals filing separate returns are entitled to

deduct interest on up to $550,000 of home debt each,

Congress implied that unmarried co-owners filing separate

returns are entitled to deduct interest on up to $1.1 million of

home debt each. We accordingly reverse the Tax Court’s

decision and remand for the limited purpose of allowing the

parties to determine, in a manner consistent with this opinion,

the proper amount of qualified residence interest that
36 VOSS V. CIR

petitioners are entitled to deduct, as well as the proper amount

of any remaining deficiency.

REVERSED and REMANDED.

IKUTA, Circuit Judge, dissenting:

Today the majority interprets the Tax Code to allow

unmarried taxpayers who buy an expensive residence

together to deduct twice the amount of interest paid on the

debt secured by their residence than spouses would be

allowed to deduct. While the language of the relevant statute

is ambiguous, the IRS has offered an interpretation that limits

unmarried taxpayers in this situation to deducting the same

amount as married taxpayers filing jointly. Because we

should defer to this reasonable interpretation by the IRS, I

dissent.

I

The Internal Revenue Code provides that interest paid or

accrued on indebtedness shall generally be allowed as a

federal tax deduction. 26 U.S.C. § 163(a). Deductions for

personal interest paid or accrued are generally disallowed. Id.

§ 163(h)(1). Congress made an exception from this

disallowance for “qualified residence interest (within the

meaning of [§ 163(h)(3)]).” Id. § 163(h)(2). “Qualified

residence interest” is defined in § 163(h)(3) as follows:

(3) Qualified residence interest–For purposes

of this subsection–
VOSS V. CIR 37

(A) In general.–The term “qualified

residence interest” means any interest

which is paid or accrued during the

taxable year on–

(i) acquisition indebtedness with

respect to any qualified residence of

the taxpayer, or

(ii) home equity indebtedness with

respect to any qualified residence of

the taxpayer.

The statute defines “qualified residence” as “the principal

residence” of a taxpayer and one other selected home used as

a residence. Id. § 163(h)(4)(A)(i). The term “acquisition

indebtedness,” is defined as debt “incurred in acquiring,

constructing, or substantially improving any qualified

residence of the taxpayer, and [which] is secured by such

residence.” Id. § 163(h)(3)(B). But not all such debt counts

as acquisition indebtedness. Rather, “[t]he aggregate amount

treated as acquisition indebtedness for any period shall not

exceed $1,000,000 ($500,000 in the case of a married

individual filing a separate return).” Id. § 163(h)(3)(B)(ii). 

Similarly, the term “home equity indebtedness” is defined as

“indebtedness (other than acquisition indebtedness) secured

by a qualified residence. . . .” Id. § 163(h)(3)(C)(i). But

again, not all the debt secured by the qualified residence

counts as home equity indebtedness. Like the case of

acquisition indebtedness, “[t]he aggregate amount treated as

home equity indebtedness for any period shall not exceed

$100,000 ($50,000 in the case of a separate return by a

married individual).” Id. § 163(h)(3)(C)(ii).
38 VOSS V. CIR

The IRS has adopted a straightforward application of this

statute when there is a single taxpayer or a married couple

filing jointly. If a qualified residence serves as security for

debt that is more than the specified $1.1 million, only the

interest payments on the allowed $1.1 million of the debt are

deductible. In the case of an individual taxpayer, the IRS

calculates the proportion of the taxpayer’s total interest

payments that is deductible by dividing the $1.1 million of

debt by the total amount of debt secured by the qualified

residence. See 26 C.F.R. § 1.163-10T(e);1 Chief Couns.

Advice, IRS CCA 200911007, 2009 WL 641772.2 So if the

qualified residence is security for $2.2 million in debt, the

taxpayer can calculate the proportion of interest payments

that is deductible by dividing $1.1 million (the total aggregate

debt allowed by the statute) by $2.2 million (the total amount

of debt secured by the qualified residence). The result is that

1

26 C.F.R. § 1.163-10T discusses “qualified residence interest” in 26

U.S.C. § 163(h)(3). § 1.163-10T(e) provides a formula to determine

qualified residence interest when secured debt exceeds the adjusted

purchase price of a house. The parties do not dispute that it is also the

applicable formula for purposes of determiningwhat proportion ofinterest

payments is deductible when “the average balance of the debt” exceeds

the “applicable debt limit.” 26 C.F.R. § 1.163-10T(e). The majority

concedes that § 1.163-10T(e) applies in this context, Maj. Op. at 6, 14 n.5,

but argues that it “only addresses the situation of a single taxpayer,” Maj.

Op. at 28 n.11. Nothing in the regulation supports the majority’s

assertion, however; rather, the IRS has concluded that the regulation does

apply to co-owners. See IRS CCA 200911007, 2009 WL 641772.

2 Although the IRS does not deem Chief Counsel Advice letters to be

precedential, courts cite these statements when they are helpful in light of

an agency’s expertise and established practice. See, e.g., Hall v. United

States, 132 S. Ct. 1882, 1890 (2012) (holding that there was “no reason to

depart from those established understandings” contained in an IRS Chief

Counsel Advice statement, its manual, and its litigation guidelines); see

also Wells Fargo & Co. v. United States, 119 Fed Cl. 27, 37–38 (2014).
VOSS V. CIR 39

the taxpayer can deduct one half of the interest the taxpayer

paid on the total debt.

Similarly, spouses filing jointly are subject to the

$1,000,000 limit on acquisition indebtedness and the

$100,000 limit on home equity indebtedness. See Pau v.

Comm’r, 73 T.C.M. (CCH) 1819, 1997 WL 28678, at *1, 12

(1997). This approach is consistent with the Tax Code’s

typical treatment of a married couple filing jointly as one

taxpayer, who together have an aggregate debt and together

are subject to the statutory limit on how much interest they

may deduct. See, e.g., 26 C.F.R. § 1.179-2(b)(5)(i) (“A

husband and wife who file a joint income tax return . . . are

treated as one taxpayer in determining the amount of the

dollar limitation under . . . this section.”); 26 C.F.R. § 1.469-

1T(j)(1) (“[S]pouses filing a joint return for a taxable year

shall be treated for such year as one taxpayer for purposes of

section 469.”).

The IRS has also explained how this methodology applies

when there are unmarried co-owners of a qualified residence. 

See Chief Couns. Advice, IRS CCA 200911007, 2009 WL

641772. Under the IRS’s interpretation, regardless of the

number of unmarried taxpayers who have an ownership

interest in a qualified residence, only interest payments on

$1.1 million of the debt encumbering that qualified residence

are deductible. Therefore, the IRS applies its formula as

follows: each co-owner who has an ownership interest in the

qualified residence may deduct a percentage of the interest

payments the co-owner paid or accrued, in proportion to the

total aggregate debt allowed by the statute ($1.1 million)

divided by the total amount of debt secured by the qualified

residence. In other words, if a taxpayer has an ownership

interest in a qualified residence that is security for $2.2
40 VOSS V. CIR

million of debt, the taxpayer can deduct one half of the

interest payments that the taxpayer made on that debt ($1.1

million debt allowed by statute divided by $2.2 million debt

secured by the qualified residence). The other co-owners can

do the same.

II

Bruce Voss and Charles Sophy argue that we should

reject the IRS’s interpretation of 26 U.S.C. § 163(h) and

allow them double the deductible interest that an individual

taxpayer or married couple filing jointly would get. Voss and

Sophy are an unmarried couple who both claim the same

qualified residence, which is comprised of two houses. In

order to purchase their primary home in Beverly Hills,

California, they took out a $2,240,000 loan. They also

borrowed another $300,000 home equity line of credit

secured by the Beverly Hills home. In order to purchase their

second home in Rancho Mirage, California, they took out a

$486,300 loan. Voss and Sophy purchased these houses as

joint tenants, meaning that each had an undivided one-half

interest in the house. They also agreed to be jointly and

severally liable on all loans.

Voss and Sophy filed separate tax returns for tax years

2006 and 2007. The average balance on the two mortgages

and home equity line of credit was approximately $2.7

million in tax years 2006 and 2007. Nevertheless, both Voss

and Sophy claimed deductions for the full amount of interest

each had paid on the loans on their qualified residence.3

3 The deductions Voss and Sophy claimed on their tax returns were

much greater than the amount they now claim under their current

interpretation of § 163(h).
VOSS V. CIR 41

The IRS issued notices of deficiency because Voss and

Sophy had claimed deductions that exceeded the limits

allowed by the Internal Revenue Code. According to the IRS,

Voss and Sophy could claim deductions for interest they had

paid on the first $1.1 million of the $2.7 million debt,

pursuant to 26 U.S.C. § 163(h)(3), and were not entitled to

claim deductions for interest paid on the entire $2.7 million

of the debt. The tax court agreed.

On appeal, Voss and Sophy argue for a different

interpretation of § 163(h) and therefore a different application

of the IRS formula. Voss and Sophy claim that the $1.1

million “aggregate amount” of debt that can be treated as

acquisition and home equity indebtedness for purposes of

§ 163(h)(3)(B) does not relate to the total amount of debt

encumbering a qualified residence. Instead, if the total

amount of debt encumbering a qualified residence exceeds

$1.1 million, the co-owners may effectively divide that total

amount of debt between themselves and each deduct interest

payments on up to $1.1 million of their portion of the total

debt. For example, if a $2.2 million debt is secured by a

qualified residence owned bytwo co-owners, Voss and Sophy

claim that the co-owners can divide the debt equally between

themselves. Under this theory, Co-Owner 1 could deduct

interest payments made on $1.1 million of debt (i.e., 100

percent of Co-Owner 1’s interest payments), and of course,

Co-Owner 2 could do the same thing. As a result, the coowners could deduct interest payments on $2.2 million of

debt secured by their qualified residence, even though a

married couple filing jointly or a single taxpayer could deduct

interest on only $1.1 million of debt.

Applying their interpretation, Voss argues that, because

he and Sophy each have an “equal share of the mortgage,” he
42 VOSS V. CIR

and Sophy have divided the $2.7 million debt between

themselves on a fifty-fifty basis. Therefore, Voss can deduct

interest payments made on $1.1 million of his $1.35 million

portion of the debt secured by his qualified residence. 

Dividing $1.1 million (the total aggregate debt allowed by the

statute) by $1.35 million (Voss’s self-apportioned amount of

debt secured by the qualified residence), this means about 80

percent of his interest payments is deductible. And, the

argument goes, Sophy can do the same thing. As a result,

Voss and Sophy claim they can deduct 80 percent of the

interest paid on $2.7 million, the total indebtedness on their

qualified residence, rather than deducting 40 percent of the

interest paid on that debt had they been a married couple.

III

Voss and Sophy’s approach to § 163(h) should be rejected

because it is contrary to the IRS’s reasonable and persuasive

interpretation of the statute. Voss and Sophy cannot claim

that the plain language of § 163(h) compels their

interpretation; rather, the statute gives no indication that

multiple co-owners may each “treat” $1.1 million of debt as

“acquisition indebtedness” or “home equityindebtedness” for

purposes of an interest deduction. In these circumstances, we

can afford respect to an agency’s interpretation of a statute,

whether it is offered in an opinion letter, policy statement,

agency manual, or even a well-reasoned legal brief. See

Christensen v. Harris Cnty., 529 U.S. 576, 587 (2000) (citing

Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)); see also

Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156,

2165–66, 2169 (2012). An agency interpretation of a statute

is entitled to a “measure of deference proportional to the

‘“thoroughness evident in its consideration, the validity of its

reasoning, its consistency with earlier and later
VOSS V. CIR 43

pronouncements, and all those factors which give it power to

persuade.’”” Christopher, 132 S. Ct. at 2168–69 (quoting

United States v. Mead Corp., 533 U.S. 218, 228 (2001)

(quoting Skidmore, 323 U.S. at 140)). We also consider the

specialized and technical expertise of the agency, see

Skidmore, 323 U.S. at 140 (noting that the “rulings,

interpretations and opinions” of an agency “constitute a body

of experience and informed judgment to which courts and

litigants may properly resort for guidance”), as well as

whether the agency’s guidance is longstanding or merely a

litigating position. See Alaska Dept. of Envtl. Conservation

v. EPA, 540 U.S. 461, 487–88 (2004) (“We ‘normally accord

particular deference to an agency interpretation of

“longstanding” duration . . . .’” (quoting Barnhart v. Walton,

535 U.S. 212, 220 (2002))).

Here, the IRS’s position, expressed in its legal brief on

appeal and in its 2009 Chief Counsel Advice statement, is

both reasonable and persuasive. First, it is consistent with the

text of the statute: the language of § 163(h)(3) is reasonably

read to establish that the debt limit of $1.1 million per

qualified residence applies regardless whether there is one

owner or two co-owners. The fact that “acquisition

indebtedness” is defined as debt secured by a qualified

residence suggests that Congress also contemplated that the

“aggregate amount treated as acquisition indebtedness” was

also defined with respect to a qualified residence. 26 U.S.C.

§ 163(h)(3)(B).

And the IRS’s interpretation is more persuasive than Voss

and Sophy’s interpretation, which would result in a windfall

to unmarried taxpayers. See Tablada v. Thomas, 533 F.3d

800, 807 (9th Cir. 2008) (holding that the Bureau of Prisons’s

method for calculating good time credits was a reasonable
44 VOSS V. CIR

interpretation of the statute, in part because the plaintiff’s

contrarymethod would result in a “windfall” to prisoners that

Congress did not intend). There is no basis to infer that

Congress intended to allow unmarried co-owners of a

qualified residence filing separately to deduct interest on up

to $2.2 million of debt, while limiting married co-owners of

a qualified residence to deduct interest on only half that (only

up to $1.1 million of debt). A more logical inference is that

the deduction was aimed at promoting home ownership for

ordinary folks, not to help wealthy individuals purchase

mansions that are encumbered with more than $1.1 million of

debt.

Third, the IRS has applied its expert interpretation of

§ 163(h) consistently for many years. See id. at 807–08

(noting that the Bureau of Prisons had calculated good time

credits by a consistent methodology for at least sixteen

years). The IRS first set forth a methodology for determining

what proportion of a taxpayer’s interest payments is

deductible in 1987, when it promulgated regulation § 1.163-

10T(e). It explained how this method applied to co-owners

of a qualified residence in its Chief Counsel Advice statement

in 2009. IRS CCA 200911007, 2009 WL 641772. There is

no dispute that the IRS’s approach for calculating the

deductibility of interest payments under § 163(h)(3)(B) is not

merely “an agency’s convenient litigating position.” Bowen

v. Georgetown Univ. Hosp., 488 U.S. 204, 213 (1988). Under

these circumstances, it is appropriate to defer to the IRS’s

specialized expertise and understanding of what best

effectuates the purpose of the statute.4

4 The majority claims that it is inconsistent to defer to the IRS’s position

regarding the deduction for unmarried co-owners while failing to defer to

the IRS regarding the deduction for married individuals filing separately. 
VOSS V. CIR 45

In response to the IRS’s reasonable interpretation of

§ 163(h)(3)(B), Voss and Sophy look for help in a separate

section of the Tax Code governing apportioning gain based

on the sale of a residence, 26 U.S.C. § 121, and its

accompanying regulation, 26 C.F.R. § 1.121-2. Section 121

allows a taxpayer who sells a residence to exclude up to

$250,000 of gain from gross income. 26 U.S.C. § 121(b)(1). 

The regulations clarify that “[i]f taxpayers jointly own a

principal residence but file separate returns, each taxpayer

may exclude from gross income up to $250,000 of gain that

is attributable to each taxpayer’s interest in the property. . . .” 

26 C.F.R. § 1.121-2(a)(2). Voss and Sophy argue that

because § 163(h) cross-references 26 U.S.C. § 121 for the

definition of a “qualified residence,” the methodology set

forth in § 1.121-2(a)(2) should also apply to § 163(h). 

Accordingly, they argue, because they jointly own a qualified

residence, and file separate returns, they should likewise be

able to deduct the amount of interest each paid on $1.1

million of debt out of each co-owner’s “equal share of the

mortgage.” But section 121 provides Voss and Sophy no

support because it has nothing to do with § 163(h)(3). Other

than the use of § 121 for the definition of “qualified

residence,” there is no indication that either Congress or the

IRS contemplated that the methodology in § 1.121-2(a)

should be used to determine the method of determining which

interest is deductible under 26 U.S.C. § 163(h)(3). Voss and

Sophy’s argument merely shows the IRS knew how to

Maj. Op. at 34–35. But, as discussed below, the IRS has not expressed a

position as to what deduction married individuals filing separately may

claim. See infra note 5. As such, there is no interpretation to which we

could defer regarding what the statute means for married individuals filing

separately. By contrast, the IRS has offered a clear interpretation of the

statute as it applies to unmarried co-owners. We should defer to that

interpretation.
46 VOSS V. CIR

authorize such a methodology when it chose to do so, which

it did not when interpreting § 163(h).

In the absence of an IRS regulation interpreting § 163(h)

as allowing co-owners to claim deductions attributable to

more than $1.1 million of debt for a co-owned qualified

residence, we should defer to the IRS’s interpretation of the

statute as limiting co-owners to deducting interest on $1.1

million of debt out of the total acquisition and home equity

debt secured by the qualified residence. See Christensen, 529

U.S. at 587.

IV

The majority agrees that the statute is silent as to how to

apply the debt limit of $1.1 million when there are co-owners

of a qualified residence. Maj. Op. at 7, 14. The majority

therefore exerts “considerable effort,” id. at 14, to find textual

support for using the approach demanded byVoss and Sophy. 

The majority bases its ruling on the thinnest of reeds: the

parenthetical in § 163(h)(3) that specifies that a married

individual filing separately can deduct interest payments on

half the amount of debt compared to a single individual or a

married couple filing jointly. According to the majority, in

order to avoid absurdity, we should read the marriage

parenthetical as allowingmarried individuals filing separately

each to deduct interest on $550,000 of debt. Maj. Op. at

16–17. If married individuals filing separately were not each

able to deduct interest on $550,000 of debt through some

unspecified calculation methodology, the majority asserts,

spouses filing separately would receive half the deduction of

spouses filing jointly. This is absurd, the majority claims,

because a different debt limit for a jointly filing couple and a

separately filing couple is “surely not what the statute
VOSS V. CIR 47

intended.” Maj. Op. at 17. The majority then leaps from this

inferred congressional intent to a different conclusion: 

Congress must also have intended to allow all unmarried

individuals who co-own a qualified residence secured by debt

to deduct interest on the full debt limit, $1.1 million.

This argument too fails. First, effectuating the majority’s

approach to the marriage parenthetical would presumably

entail allowing a married taxpayer filing separately to deduct

his or her own interest payments on the debt in the proportion

of $550,000 divided by one half of the total debt secured by

the qualified residence. See Maj. Op. at 28 n.11 (agreeing

that the IRS’s formula set out in § 1.163-10T(e) “may need to

be adjusted to account for the situation of separately filing coowners, whether married or unmarried”). If each married

taxpayer took this approach, married taxpayers filing

separately would deduct the same amount of interest as

married taxpayers filing jointly. But this approach fails for

the same reason Voss and Sophy’s apportionment theory

fails: it flies free of the statutory language that limits the

amount “treated” as acquisition or home equity indebtedness

to a capped amount out of the total acquisition or home

equity indebtedness secured by the residence (rather than one

co-owner’s half of that total debt).5 We should instead defer

5 The majority asserts that there is a clear consensus among tax courts

and the IRS that a married couple filing separately may, in the aggregate,

deduct interest on up to $1.1 million of qualifying debt. See Maj. Op. at

17–18 n.8, 34–35. This is incorrect. While the sources cited by the

majority correctly indicate that the debt limit in the statute is $550,000 for

“each” married individual filing a separate return, none of these sources

explains how the IRS would apply its formula to calculate the interest

deduction for a married individual filing separately. Because the meaning

of the marriage parenthetical is unclear, it does not undercut the IRS’s
48 VOSS V. CIR

to the IRS’s reasonable interpretation that the statute defines

“acquisition indebtedness” as “indebtedness incurred in

acquiring a qualified residence of the taxpayer - not as

indebtedness incurred in acquiring taxpayer’s portion of a

qualified residence.” IRS CCA 200911007, 2009 WL

641772.

More importantly, the majority’s argumentum ad

absurdum fails because imposing a penalty on married

individuals for filing separately would not be not absurd. We

know that Congress could reasonably decide to discourage a

married couple from filing separate returns to minimize taxes,

because it has imposed such penalties in other portions of the

Tax Code. For example, the Tax Code prohibits married

individuals filing separately from claiming certain tax credits

or deducting interest on other types of loans. See, e.g., 26

U.S.C. § 32(d) (married individual filing separately is not

eligible for an earned income credit); id. § 221(e) (married

individual filing separately is not eligible for deducting

interest on student loans). Indeed, a tax court has already

held that the plain language of § 163(h) may result in a

penalty on a married couple filing separately compared to a

married couple filing jointly. See Bronstein v. Comm’r, 138

T.C. 382, 383–84 (2012) (rejecting a taxpayer’s argument

that Congress intended for married couples filing separately

to receive the same treatment under § 163(h)(3) as married

couples filing jointly).

Rather, the absurdity argument works against the

majority. The majority’s approach would result in spouses

filing jointly (or separately) getting half the total deduction of

unambiguous position that unmarried co-owners may not receive double

the deduction of married co-owners.
VOSS V. CIR 49

unmarried individuals.

6 The majority writes this off as a

marriage penalty, supported by hypothetical policy reasons

why Congress may have intended such a result. Maj. Op. at

28–30. But the majority’s view that Congress intended to

penalize married co-owners bygiving them half the deduction

allowed to unmarried co-owners seems more absurd than the

view that Congress may have intended to penalize married

couples filing separately. After all, it is more reasonable to

think that Congress wanted to encourage married couples to

file jointly to avoid a statutory penalty than it is to think that

Congress wanted to encourage taxpayers not to marry (or to

get divorced) in order to avoid forfeiting half the deduction

they could otherwise take. Given that reasonable jurists could

point to either interpretation as absurd, the better solution is

to defer to the IRS’s reasonable interpretation of the statute.

Finally, the majority discusses the practical difficulties

that may arise if we did not allow unmarried co-owners each

to deduct interest on up to $1.1 million of debt, such as the

problem of determining how much interest each of multiple

hypothetical co-owners may deduct. Maj. Op. at 26–27. 

Following the IRS’s reasonable interpretation of how the

statute works, each co-owner is entitled to deduct the interest

payments that the co-owner actually paid, multiplied by a

fraction consisting of $1.1 million divided by the total

6

In other words, under the majority’s theory, spouses filing jointly who

own a qualified residence encumbered with a $2.2 million loan could

deduct one half of their total interest payments (based on dividing the $1.1

million debt limit by the $2.2 million debt). But if two unmarried

taxpayers owned a qualified residence with the same $2.2 million loan, the

taxpayers could deduct 100 percent of their interest payments because

each taxpayer could treat $1.1 million as acquisition or home equity debt

(i.e., based on the $1.1 million debt limit divided by each taxpayer’s

“portion” of the debt, $1.1 million). Maj. Op. at 16–17.
50 VOSS V. CIR

aggregate debt secured by the co-owner’s qualified residence. 

So long as an individual co-owner knows the amount of

interest the co-owner personally paid, and how much debt is

secured by the qualified residence co-owned by that taxpayer,

the co-owner can calculate the amount of deductible interest. 

If there are policy consequences of the plain language that

Congress did not intend, Congress can amend the statute

itself.

The majority concedes that the statute is “anything but

‘plain’.” Maj. Op. at 32. The IRS has provided a workable

approach to Congress’s ambiguous statute that avoids many

of the problems created by the majority’s opinion. Neither

the majority nor Voss and Sophy offer arguments that would

compel departing from this approach. I would affirm the tax

court.