- 19 -
Co., 333 U.S. 496, 501 (1948); Tate & Lyle, Inc. v. Commissioner,
103 T.C. 656 (1994), revd. on other grounds 87 F.3d 99 (3d Cir.
1996); Jablonski v. Commissioner, T.C. Memo. 1998-396. Ultimately,
the validity of a regulation is determined by its reasonableness
and whether it harmonizes with the plain language of the statute,
its origin, and its purpose. See National Muffler Dealers
Association, Inc. v. United States, 440 U.S. 472, 477 (1979); Coca
Cola Co. & Includible Subs. v. Commissioner, 106 T.C. 1, 19
(1996); Estate of Bullard v. Commissioner, 87 T.C. 261, 269 (1986).
The starting point in determining the deference given to a
regulation is whether the regulation is legislative or interpretive
in nature. See Mordkin v. Commissioner, T.C. Memo. 1996-187
(citing Dresser Indus., Inc. v. Commissioner, 911 F.2d 1128, 1137-
38 (5th Cir. 1990), affg. in part and revg. in part 92 T.C. 1276
(1989)). A legislative regulation is one that is issued under a
specific grant of authority to define a term or prescribe a method
of executing a statutory provision. See id. An interpretive
regulation is one that is promulgated under the general authority
of section 7805(a). See id.
Congress authorized the Secretary to promulgate "such
regulations as may be necessary or appropriate to carry out
provisions of [sec. 469] * * * which specify what constitutes an
activity, material participation, or active participation" for
purposes of section 469, and "requiring net income or gain from a
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