- 47 -
shifted, and must supply a persuasively reasoned explanation for
the change.18
It is in this context that (contrary to the statement in
Sidell v. Commissioner, T.C. Memo. 1999-301) the silence of the
1992 proposed regulations means something, not nothing. The
silent proposed regulations could not (and did not) serve as the
required public announcement of the Commissioner’s change of
position from the temporary regulations, or as the required
explanation of the reasons for that change. It is uncontested
that the first public announcement by the Commissioner of his
complete reversal of position was contained in the 1994 final
regulations, which were not published in the Federal Register
until October 4, 1994. See Schwalbach v. Commissioner, supra at
226; 59 Fed. Reg. 50485 (Oct. 4, 1994) (promulgation of 1994
final regulations).
I agree with our conclusion in Schwalbach v. Commissioner,
supra, that the silence of the 1992 proposed regulations alerted
taxpayers to the possibility that the Commissioner was
considering changing the nonattribution rule contained in the
18 In Georgia Fed. Bank v. Commissioner, 98 T.C. 105, 109-
110 (1992), we also observed that if a regulation repudiates an
earlier interpretation, the manner in which it evolved merits
inquiry, and the more recent interpretation may be accorded less
deference than a consistently maintained position. We further
noted that an agency’s action must be upheld, if at all, on the
basis articulated by the agency at the time of the rule making;
post hoc rationalizations cannot be offered to buttress an
agency’s action.
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