The fines for Federal and state are nondeductible [§162(f)]. Federal income taxes are always nondeductible [§275(a)(1)]. State income taxes are deductible in the year paid for cash basis taxpayers[§164(a)(3)]. Temp. Reg. §1.163-9T(a) allows corporations to deduct interest on all underpayments of federal, state and local taxes. But according to Temp. Reg. §1.163-9T(b)(2), interest paid by an individual on an income tax deficiency is nondeductible regardless of the source of income generating the tax liability.