Greenberg Brothers Partnership #4, a.k.a. Breathless Associates, Richard M. Greenberg, Tax Matters Partner, et al. - Page 16

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               Participants attempt to place these cases within the realm             
          of those decisions in which courts have invalidated Treasury                
          regulations.  Although it is well settled that respondent "may              
          not usurp the authority of Congress by adding restrictions to a             
          statute which are not there", Estate of Boeshore v. Commissioner,           
          78 T.C. 523, 527 (1982), participants' reliance on this line of             
          authority is misplaced.  In each of the cases cited by the                  
          participants, a regulation was invalidated either because it                
          directly conflicted with an unambiguous statutory provision or              
          because it was inimical to the clear congressional mandate set              
          forth in the pertinent legislative history.15  As previously                

               15                                                                     
                    See, e.g., United States v. Vogel Fertilizer Co., 455             
          U.S. 16, 26 (1982) ("The legislative history of sec. 1563(a)(2)             
          resolves any ambiguity in the statutory language and makes it               
          plain that Treas. Reg. sec. 1.1563-1(a)(3) is not a reasonable              
          statutory interpretation."); Koshland v. Helvering, 298 U.S. 441,           
          447 (1936) ("where, as in this case, the provisions of the act              
          are unambiguous, and its directions specific, there is no power             
          to amend it by regulation"); Jackson Family Foundation v.                   
          Commissioner, 97 T.C. 534, 542 (1991), affd. 15 F.3d 917 (9th               
          Cir. 1994) ("there is simply no statutory basis for the                     
          regulation"); (holding that sec. 1.863-1(b), Income Tax Regs.,              
          contradicts the clear and unambiguous language of sec.                      
          863(b)(2)); Phillips Petroleum Co. v. Commissioner, 97 T.C. 30,             
          34-36 (1991), affd. without published opinion 70 F.3d 1282 (10th            
          Cir. 1995); Durbin Paper Stock Co. v. Commissioner, 80 T.C. 252,            
          260 (1983) ("we find section 992(a)(1)(C) to be unambiguous.  In            
          our view, there is no statutory authority for the 'paid-in'                 
          capital requirement set forth in section 1.992-1(d)(1), Income              
          Tax Regs."); Estate of Boeshore v. Commissioner, 78 T.C. 523,               
          531-532 (1982) ("the regulation adds restrictions to the statute            
          that are not there, and the regulation is out of 'harmony' with             
          the statute's origin and purpose"); ("respondent's interpretation           
          of section 103(c)(2)(A) is at odds with the legislative history             
          and the totality of the circumstances surrounding the enactment             
                                                             (continued...)           




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