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(b), 1245(b)(3). Nevertheless, the majority has persuaded me
that we should proceed as if section 83(h) were ambiguous.1
We are not without guidance, however, because we have
interpretive regulations, section 1.83-6(a), Income Tax Regs.
(section 1.83-6(a)).2 Those regulations contain both a general
rule, in subparagraph (1) (the general rule), and a special rule,
in subparagraph (2) (the special rule). The general rule is as
follows: “[The section 83(h) deduction] shall be allowed only
for the taxable year of such person [the service consumer] in
which or with which ends the taxable year of the service provider
in which such amount is includible as compensation.” (Emphasis
added.) The general rule applies to all service consumers,
whether an employment relationship exists with the service
provider or not. The special rule applies only to service
consumers that are employers, and it differs from the general
rule only in that it conditions the deduction on withholding.
In Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 842-843 (1984), the Supreme Court
stated that, when a Court reviews an agency’s construction of a
statute that it administers, it is confronted with two questions:
1 “Ambiguity exists if reasonable persons can find
different meanings in a statute”. Black’s Law Dictionary 79 (6th
ed. 1990)
2 References to sec. 1.83-6(a), Income Tax Regs., are to
that section prior to amendment by T.D. 8599, 1995-2 C.B. 12
(effective July 19, 1995).
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