Estate of John W. Clause, Deceased, Thomas Y. Clause, Personal Respresentative - Page 8

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          Thus, the election to apply section 1042 to a sale of stock                 
          (statement of election) and the verified written statement from             
          the employer or authorized officer consenting to the application            
          of sections 4978 and 4979A (statement of consent) are statutory             
          requirements.  The statute also requires that the taxpayer elect            
          to be treated under section 1042 by the due date of the tax                 
          return, including extensions.  Sec. 1042(c)(6).                             
               The Secretary has prescribed a regulation for the form of              
          the election required under section 1042.  Sec. 1.1042-1T,                  
          Temporary Income Tax Regs., 51 Fed. Reg. 4333 (Feb. 4, 1986);2              
          see sec. 1042(a).  Our analysis of the regulation is informed by            
          Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S.           
          837, 842-843 (1984).  In Chevron, the U.S. Supreme Court stated             
          the analysis as follows:                                                    
                    When a court reviews an agency’s construction of the              
               statute which it administers, it is confronted with two                
               questions.  First, always, is the question whether Congress            
               has directly spoken to the precise question at issue.  If              
               the intent of Congress is clear, that is the end of the                
               matter; for the court, as well as the agency, must give                
               effect to the unambiguously expressed intent of Congress.              
               If, however, the court determines Congress has not directly            
               addressed the precise question at issue, * * *.  * * * the             
               question for the court is whether the agency’s answer is               
               based on a permissible construction of the statute.  [Fn.              
               refs. omitted.]                                                        



               2  Temporary regulations are entitled to the same weight as            
          final regulations.  See Peterson Marital Trust v. Commissioner,             
          102 T.C. 790, 797 (1994), affd. 78 F.3d 795 (2d Cir. 1996); Truck           
          & Equip. Corp. v. Commissioner, 98 T.C. 141, 149 (1992).                    





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