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Also, the suggestion calling into question the Secretary’s
and respondent’s motive in promulgating the particular regulation
involved herein is inaccurate, as was the similar suggestion in
Swallows Holding v. Commissioner, supra at 136, 138, 147-148.
Section 26.2601-1(b)(1)(i), GST Tax Regs., was promulgated in
2000, T.D. 8912, 2001-1 C.B. 452, after respondent’s
interpretation of the statutory transition rule of section
1433(b)(2)(A) had been accepted by the Court of Appeals for the
Second Circuit in Peterson Marital Trust v. Commissioner, 78 F.3d
795 (1996), by two District Courts in Bachler v. United States,
126 F. Supp. 2d 1279 (N.D. Cal. 2000), and Simpson v. United
States, 17 F. Supp. 2d 972 (W.D. Mo. 1998), and by this Court in
Peterson Marital Trust v. Commissioner, 102 T.C. 790 (1994).
By December of 2000, when the regulation at issue herein was
promulgated, respondent’s interpretation of the statutory
transition rule of TRA 1986 section 1433(b)(2)(A) had been
rejected by the Court of Appeals for the Eighth Circuit in
Simpson v. United States, 183 F.3d 812 (8th Cir. 1999). However,
in light of the above four Federal court opinions that had
adopted respondent’s statutory interpretation, it is an
overstatement and simply not correct to suggest that the
Secretary’s regulation bootstrapped a failed litigating position.
With the responsibility for tax administration and with the
authority and responsibility under section 7805(a) to provide
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