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disputed claim related to that contract as soon as it is
reasonably estimated that income from the claim will be received.
Respondent maintains that the regulation’s inclusion of disputed
claims in the percentage of completion method satisfies
congressional intent and is therefore valid.
Validity of Sec. 1.460-6(c)(2)(vi), Income Tax Regs.
A. Standard of Review
Regulations are either legislative or interpretive in
character. See Estate of Pullin v. Commissioner, 84 T.C. 789,
795 (1985). An interpretive regulation is issued under the
general authority vested in the Secretary by section 7805,
whereas a legislative regulation is issued pursuant to a specific
congressional delegation to the Secretary. Section 1.460-
6(c)(2)(vi), Income Tax Regs., appears to be issued under the
regulatory authority of section 460(h). Respondent, however,
conceded that this regulation is interpretive. Accordingly, we
need not determine whether this regulation is legislative or
interpretive in nature. We note, however, that our holding would
be the same regardless of whether we use the standard employed
for legislative or interpretive regulations.
An interpretive regulation, while entitled to deference, is
not entitled to as much deference as is accorded a legislative
regulation. See United States v. Vogel Fertilizer Co., 455 U.S.
16, 24 (1982). Moreover, the standard of deference accorded to
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