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as a commission FSC rather than a buy-sell FSC, and
vice versa. [Sec. 1.925(a)-1T(e)(4), Temporary Income
Tax Regs., 52 Fed. Reg. 6448 (Mar. 3, 1987).]
Petitioner and respondent agree that the Regulation permits
an FSC and its related supplier to redetermine the transfer price
or commission reported on their original returns through the
filing of amended returns, provided that the conditions of the
Regulation are satisfied. The parties lock horns, however, over
the scope of the requirements imposed by the Regulation on the
redetermination of FSC commissions by a related supplier and an
FSC. More specifically, the parties dispute the import of
sentence No. 4 of the Regulation.
Regulations that are valid exercises of the powers of the
Secretary have the force and effect of law. Sim-Air, USA, Ltd.
v. Commissioner, 98 T.C. 187, 198 (1992). The rules for
interpreting regulations resemble those governing the
interpretation of statutes. See, e.g., KCMC, Inc. v. FCC, 600
F.2d 546, 549 (5th Cir. 1979); Intel Corp. & Consol. Subs. v.
Commissioner, 100 T.C. at 631. When construing a statute or a
regulation, courts are to give effect to its plain and ordinary
meaning unless doing so would produce absurd or unreasonable
results. Green v. Bock Laundry Mach. Co., 490 U.S. 504, 509
(1989); KCMC, Inc. v. FCC, supra at 549; Exxon Corp. v.
Commissioner, 102 T.C. 721 (1994). The most basic tenet of
statutory construction is to start with the language of the
statute itself. United States v. Ron Pair Enters., Inc., 489
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