Your corporate client wants to issue 100-year bonds . The corporation 's CEO reads The Wall Street Journal regularly and has observed that similar bonds have been issued by several companies, including several Fortune 500 companies. He touts the fact that the interest rate on these bonds is slightly more than that for 30-year U.S. Treasury bonds . In addition, he expresses the belief that interest on the bonds would be deductible, whereas dividends on preferred or common stock would be nondeductible. You are concerned that the IRS might treat the bonds as equity because of their extraordinarily long term. If the IRS does treat the bonds as such, it might recharacterize the "interest" as dividends and deny your client an interest deduction. What advice would you give the client now regarding the bond issue? What advice would you give it when it prepares its tax return after the new bonds have been issued?