-20-
Our view is further supported by the well-established
principle that the judiciary should accord substantial deference
to the Commissioner’s interpretation of Treasury regulations, see
Jewett v. Commissioner, 455 U.S. 305, 318 (1982); Ford Motor Co.
v. Milhollin, 444 U.S. 555, 565-566 (1980); Blessitt v. Ret. Plan
for Employees of Dixie Engine Co., 848 F.2d 1164, 1167-1168 (11th
Cir. 1988) (en banc); see also Anderson Bros. Ford v. Valencia,
452 U.S. 205, 219 (1981) (“absent some obvious repugnance to the
statute, the * * * [agency’s] regulation implementing this
legislation should be accepted by the courts, as should the * * *
[agency’s] interpretation of its own regulation”),7 and the fact
that the Treasury Department has recently amended its regulations
on this subject to clarify the rules applicable to revocable
spousal interests and to clarify its view that section 2702 was
enacted to overcome both (1) a problem concerning an uncertainty
6(...continued)
the retention of a qualified annuity interest (or unitrust
interest). Thus, absent an explicit marriage contingency in this
case, such a contingency is implicit. See generally Kozusko,
“Commentary on Schott v. Commissioner”, 28 Tax Mgmt. Est., Gifts
& Tr. J. 165, 166 (2003).
7 Of course, as we have just recently noted, deference is
not required to the extent that the regulation is incompatible
with the plain meaning of the text of the statute that it
purports to construe. See Swallows Holding, Ltd. v.
Commissioner, 126 T.C. (2006); see also Natl. Muffler Dealers
Association v. United States, 440 U.S. 472, 477 (1979)
(interpretative Federal tax regulation is reasonable only if it
“harmonizes with the plain language of the statute, its origin,
and its purpose”).
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