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A legislative regulation, which is issued pursuant to a
specific congressional delegation to the Secretary, is entitled
to greater deference than an interpretive regulation, which is
promulgated under the general rulemaking power vested in the
Secretary by section 7805(a). Peterson Marital Trust v.
Commissioner, 102 T.C. 790, 797 (1994), affd. 78 F.3d 795 (2d
Cir. 1996). Participants concede that section 301.6224(c)-3T,
Temporary Proced. & Admin. Regs., supra, is legislative in
character, and we accord the regulation the highest level of
judicial deference; viz, we are not to invalidate the regulation
unless it is arbitrary, capricious, or manifestly contrary to the
statute.13 Chevron U.S.A., Inc. v. Natural Resources Defense
Council, Inc., supra at 843-844; see also Ahmetovic v.
Immigration and Naturalization Service, 62 F.3d 48, 51 (2d Cir.
1995). To be valid, section 301.6224(c)-3T(b), Temporary Proced.
& Admin. Regs., supra, need not be the only, or even the best,
construction of section 6224(c)(2). See Atlantic Mutual Ins. Co.
v. Commissioner, 523 U.S. ___, 118 S.Ct. 1413, 1418 (Apr. 21,
1998). The Supreme Court has stated that a reviewing court
13
Participants' opening brief regarding the consistent
settlement issues states as follows: "Treas. Reg. [sec.]
301.6224(c)-3T(b) is a legislative regulation promulgated
pursuant to Respondent's [sic] grant of authority in [sec.]
6230(k)." Even under the less deferential standard of review
applicable to interpretive regulations, we would conclude that
the regulation is valid. Cf. McKnight v. Commissioner, 7 F.3d
447 (5th Cir. 1993), affg. 99 T.C. 180 (1992).
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