- 8 -
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).
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011