- 15 -
A Revenue Ruling, however, is not entitled to the
deference accorded a statute or a Treasury Regulation.
* * * [Threlkeld v. Commissioner, 848 F.2d 81, 84 (6th
Cir. 1988), affg. 87 T.C. 1294 (1987).]
As we see it, Example (5) and not Rev. Rul. 82-20, supra,
provides the key to decision herein. It may well be that Example
(5) provides an unwarranted benefit to the taxpayer, but such a
consideration was not sufficient to tip the scales in Woods
Investment Co. v. Commissioner, 55 T.C. 274 (1985). See supra p.
10. We think as we did in Walt Disney Inc. v. Commissioner,
supra, that the same approach applies herein. Respondent's
remedy is not to seek to modify the regulation by judicial action
or administrative ruling, but to change the regulation itself.
See Walt Disney Inc. v. Commissioner, 97 T.C. at 229 (quoting at
length from Woods Investment Co. v. Commissioner, 85 T.C. at 281-
282)); see also Honeywell Inc. v. Commissioner, 87 T.C. 624, 635
(1986) (respondent had the right to amend the regulations but
could not do so "by a revenue ruling or by judicial
intervention"); Peninsula Steel Products & Equip. Co. v.
Commissioner, 78 T.C. 1029, 1052 (1982) (ruling disapproved in
light of regulation); Sims v. Commissioner, 72 T.C. 996, 1006
(1979) (rulings do not have the force of regulations).
Our approach herein obviously also reflects our disagreement
with that of the Courts of Appeals for the Second and Ninth
Circuits in according Rev. Rul. 82-20, supra, the status of
"other law" in order to apply section 1.1502-80, Income Tax Regs.
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