A taxpayer who is required to report income in one year but must repay the income in a subsequent year is granted special tax relief. If the taxpayer is in a lower marginal tax bracket in the year the income is repaid than in the year it was received, the deduction reduces the tax for the year of repayment by using the higher tax rate that applied to the income when it was received. In contrast, if a taxpayer takes a deduction in one year and receives a refund of the amount giving rise to the deduction in a subsequent year, the refund is taxed at the marginal tax rate in the year of refund. This is true even though the taxpayer’s marginal tax rate in the year of receipt is higher than that in the year of the deduction. Should both adjustments to income and adjustments to deductions receive the same tax relief? Or should neither situation be granted special relief?