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Ann Jackson Family Found. v. Commissioner, 15 F.3d 917, 920 (9th
Cir. 1994), affg. 97 T.C. 534 (1991); Greenberg Bros. Partnership
#4 v. Commissioner, 111 T.C. 198, 205 (1998); Peterson Marital
Trust v. Commissioner, 102 T.C. 790, 797 (1994), affd. 78 F.3d
795 (2d Cir. 1996). As stated in Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 843-844 (1984):
If Congress has explicitly left a gap for the agency to
fill, there is an express delegation of authority to the
agency to elucidate a specific provision of the statute by
regulation. Such legislative regulations are given
controlling weight unless they are arbitrary, capricious, or
manifestly contrary to the statute.
See also Nationsbank v. Variable Annuity Life Ins. Co., 513 U.S.
251, 256-257 (1995).
The Temporary Regulation is a legislative regulation because
it was promulgated under the specific delegation of authority
contained in section 267(f)(2)(B). See Coca-Cola Co., &
Includible Subs. v. Commissioner, 106 T.C. 1, 19 (1996) (“A
legislative regulation is made pursuant to a specific grant of
authority, often without precise congressional guidance, to
define a statutory term or prescribe a method of executing a
statutory provision.”); see also Romann v. Commissioner, 111 T.C.
273, 281-282 (1998); Schwalbach v. Commissioner, 111 T.C. 215,
222-223 (1998). Contrary to petitioner’s assertion, the mere
fact that the Temporary Regulation may embody interpretations of
the operative statutory language does not alter its
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