Stephen and Ann Schwalbach - Page 18

                                       - 18 -                                         

          (1947); Old Colony R.R. Co. v. Commissioner, 284 U.S. 552, 560              
          (1932).  Although Congress instructed the Commissioner to                   
          prescribe regulations under section 469 which would specify what            
          constitutes an activity, see sec. 469(l)(1), this does not mean             
          that section 469 or the regulations thereunder require the                  
          Commissioner to define the word "activity" in order for the                 
          statutory and regulatory provisions to be effective.  We find               
          nothing in the statutory text, or in its legislative history,               
          that conditions the effectiveness of section 469 on the issuance            
          of regulations.  See Trans City Life Ins. Co. v. Commissioner,              
          106 T.C. at 299-300; Estate of Neumann v. Commissioner, 106 T.C.            
          216 (1996); H Enters. Intl., Inc. v. Commissioner, 105 T.C. 71,             
          81-85 (1995).                                                               
               As to petitioners' assertion concerning the new language               
          that appeared in section 1.469-4(a), Income Tax Regs., the change           
          in language from the proposed regulations was substantial; up               
          until the final regulations, the Commissioner had not publicly              
          taken the position that an individual's activities could include            
          activities conducted through a C corporation.  The mere fact,               
          however, that the Commissioner adopted a new position in section            
          1.469-4(a), Income Tax Regs., does not necessarily mean that the            
          Commissioner was required to give another notice and allow                  
          another comment period on that position.  The Commissioner is not           
          required by the APA, supra, to include in proposed regulations              
          every precise rule that ultimately appears in the final                     

Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011