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(3) Those with respect to which a penalty has been
imposed at a 40 percent rate (i.e., a penalty for gross
valuation misstatement under section 6662(b)(3) and
(h)).
(4) Those with respect to which a penalty has been
imposed at a 75 percent rate (i.e., a penalty for fraud
under section 6663). [Sec. 1.6664-3(b), Income Tax
Regs.]
Respondent's computation of the penalty is in accordance with
these rules and the implementing examples. Petitioner offers an
alternative computation which he claims complies with the
statute.
In reviewing a regulation, we consider two questions as set
forth by the Supreme Court:
First, always, is the question whether Congress has
directly spoken to the precise question at issue. If
the intent of Congress is clear, that is the end of the
matter; for the court, as well as the agency, must give
effect to the unambiguously expressed intent of
Congress. * * * 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. [Chevron
U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837, 842-843 (1984); fn. refs. omitted.]
These principles were very recently reaffirmed by the Supreme
Court in Atlantic Mut. Ins. Co. v. Commissioner, 523 U.S. ,
, 118 S. Ct. 1413, 1418 (April 21, 1998), with the additional
admonition:
the task that confronts us is to decide, not whether
the Treasury regulation represents the best
interpretation of the statute, but whether it
represents a reasonable one. See Cottage Savings Assn.
v. Commissioner, 499 U.S. 554, 560-561 (1991). * * *
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