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statutory directive and no manifest congressional design with
respect to the treatment of costs under a section 458 election.
To invoke these passages from our decisions for the general
proposition that regulations may not add rules not found in the
statute and not precluded by the statute is to misread them.
Indeed, supplementation of a statute is a necessary and proper
part of the Secretary's role in the administration of our tax
laws. As the Supreme Court stated in Chevron, U.S.A. v. Natural
Res. Def. Council, 467 U.S. at 842-843:
If the intent of Congress is clear, that is the end of
the matter, * * * if the statute is silent or
ambiguous with respect to the specific issue, the
question for the court is whether the agency's answer
is based on a permissible construction of the statute.
"The power of an administrative agency to
administer a congressionally created . . . program
necessarily requires the formulation of policy and the
making of rules to fill any gap left, implicitly or
explicitly, by Congress." * * * [Citations omitted.]
"Treasury Regulations 'must be sustained unless unreasonable
and plainly inconsistent with the revenue statutes.'"
Commissioner v. Portland Cement Co., 450 U.S. 156, 169 (1981)
(quoting Commissioner v. South Texas Lumber Co., 333 U.S. 496,
501 (1948). There is no evidence that the Regulation conflicts
with either the language or the purpose of section 458. We
believe the Regulation provides an eminently reasonable solution
to a problem that the statute does not address. The correlative
cost adjustments it requires follow settled principles of tax
accounting and are consistent with generally accepted accounting
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