- 23 -
Commissioner, supra at 180, we invalidated the temporary
regulation and concluded that the Secretary did not have
discretion to “reach a result contrary to the basic objective of
the statute by requiring the recognition of additional gain
beyond what is proportionately reflected in the payments received
during the first year.”10 The regulation we consider here is a
reasonable interpretation of the statutory intent and in harmony
with the overall purpose of the legislative initiative. Thus, we
do not view Professional Equities, Inc. as instructive with
regard to the validity of the subject regulations.
Finally, petitioner argues that the subject regulations
should be declared invalid because of the alleged difficulty for
taxpayers to determine when they have a reasonable expectation of
recovery on a disputed claim. We recognize that the regulation’s
“reasonable expectancy” standard may result in difficulties in
the determination of when a contingent item can be reasonably
expected to be received. By promulgating such a regulation,
respondent may be called upon to determine when it is reasonably
foreseeable that a contingent item will be received by a
taxpayer. This may not be an easy task, and in petitioner’s
case, there is no indication whether respondent will prevail in
such a controversy. However, difficulty of this kind is not a
10 The Court also noted that the regulation was “tortuously
complex” and was not compatible with the goals of the statute.
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