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Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., supra at
842-843.
Using the Chevron analysis, we find Congress intended the
Secretary to prescribe the regulation as to the form of the
election. First, the regulation was prescribed by the Secretary
pursuant to the specific grant of authority stated in section
1042(a) that authorizes him to prescribe the form in which “the
application of this section with respect to any sale of qualified
securities” is to be elected by a taxpayer or executor. Sec.
1042(a). Further, the legislative history of section 1042 states
that Congress intended the Secretary to prescribe the form of the
election: “Under the bill, the seller’s nonrecognition election
is made by filing (as prescribed by the Secretary) an election no
later than the due date of the seller’s income tax return for the
taxable year in which the sale occurs.” S. Rept. 98-169 (Vol.
I), at 333 (1984).
With regard to the form of the election, section 1.1042-1T,
Temporary Income Tax Regs., supra, is a legislative regulation
expressly authorized by the statute. Sec. 1042(a). A
legislative regulation is given controlling weight unless it is
arbitrary, capricious, or manifestly contrary to the statute.
Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., supra at
844. We do not find the regulation to be arbitrary, capricious,
or manifestly contrary to section 1042 because the regulation is
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