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HOLMES, J., concurring: The issue before the court is
simply this--is the regulation a reasonable interpretation of the
statute? I concur with the result that the majority reaches and
with their analysis of the disputed regulation’s validity under
National Muffler.1
I write separately because the Sixth Circuit--the circuit to
which any appeal of this case is headed--has expressly adopted
Chevron2 deference for tax regulations, like the one here, that
are issued under section 7805's general authority.3 In Swallows,4
the Court aired its differences on deference under National
Muffler versus deference under Chevron. Swallows is now on
appeal, but I recognize that the majority is constrained to use
National Muffler review unless there would be a practical
certainty of reversal. See Golsen v. Commissioner, 54 T.C. 742,
757 (1970), affd. 445 F.2d 985 (10th Cir. 1971). That practical
certainty isn’t present here because, as is usually the case,
whether a regulation is valid doesn’t depend on the standard:
1 Natl. Muffler Dealers Assn. v. United States, 440 U.S.
472 (1979).
2 Chevron U.S.A., Inc., v. Natural Res. Def. Council, Inc.,
467 U.S. 837 (1984).
3 See Hosp. Corp. of Am. & Subs. v. Commissioner, 107 T.C.
73 (1996), affd. 348 F.3d 136, 140-141 (6th Cir. 2003); Peoples
Fed. Sav. & Loan Assn. v. Commissioner, T.C. Memo. 1990-129,
revd. 948 F.2d 289, 299-300 (6th Cir. 1991).
4 Swallows Holding, Ltd. v. Commissioner, 126 T.C. 96, on
appeal (3d Cir., filed July 5, 2006).
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