Frederick M. Fox, Michele B. Fox v. Commissioner Internal Revenue Service

943 F.2d 55 NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. Frederick M. FOX, Michele B. Fox, Petitioners-Appellants, v. COMMISSIONER INTERNAL REVENUE SERVICE, Respondent-Appellee. No. 90-70007. United States Court of Appeals, Ninth Circuit. Argued and Submitted April 8, 1991. Decided Sept. 6, 1991. 1 Before HUG and POOLE, Circuit Judges, and ATKINS, * District Judge. 2 MEMORANDUM ** 3 In this appeal from the tax court decision, several issues are raised in appellants' pro se brief and in the supplemental briefs filed by counsel. 4 1. The tax court disallowed the deduction of the loan points in the year they were withheld by the lender. Our circuit law is clear that when points are withheld from loan proceeds, the cash-basis taxpayer is not considered to have paid the interest. "A cash-basis taxpayer 'pays' interest only when he pays cash or its equivalent to his lender." Wilkerson v. C.I.R., 655 F.2d 980 , 982 (9th Cir.1981). When interest is withheld from loan proceeds,…