Their original proposal would have denied deductions for 100 percent of the interest on borrowings of more than $5 million.

Breaking new ground, the Administration also proposes, with some unspecified exceptions, to deny companies deductions for lobbying Congress or the executive branch.

Furthermore, the I.R.S. routinely denies deductions when an employee chooses to absorb a cost normally reimbursed by the company.

The law passed in 1993 denying deductions for amounts over $1 million applied only to a handful of the top executives of publicly owned companies.

It introduced the concept of Unrelated Business Income Tax, denied exemption to certain foundations and trusts, and denied deductions to donors of some organization which failed to meet certain standards.

It would deny deductions for the cost of tax advice that led to use of a tax shelter.

The story, as told by the lobbyist and Treasury Department officials, began early last year when the House Ways and Means Committee voted to deny deductions for club dues.

For listed transactions, the I.R.S. denies deductions claimed by investors and seeks out the shelters' promoters.

Along comes tax reform, and investors are denied deductions and are still denied the ability to charge fair-market rents and earn a fair return.

The most controversial of the proposals would have denied deductions for interest payments of more than $5 million on debt used to finance corporate acquisitions.